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SUMMARIES OF SUBSTANTIVE RATIFIED LEGISLATION - 2010
SUMMARIES OF SUBSTANTIVE
RATIFIED LEGISLATION
2009 GENERAL ASSEMBLY
2010 REGULAR SESSION
RESEARCH DIVISION
N.C. GENERAL ASSEMBLY
SEPTEMBER 2010
350 copies of this document were published at an estimated cost of or about $5.25 per copy. September 2010
To the Members of the 2010 Session of the 2009 General Assembly:
This publication contains summaries of all substantive legislation of general applicability and certain local legislation having general import from the 2010 Regular Session. Most local acts are not analyzed in this publication. Significant appropriations matters related to the subject area specified also are included. For an in-depth review of the appropriations and revenue process, please refer to Overview: Fiscal and Budgetary Actions, prepared by the Fiscal Research Division.
The document is organized alphabetically by subject areas. Where feasible, the subject area is further divided into subgroups. Each subject area also includes a listing of legislative, independent, and agency studies. A bill/session law index listing the page number of each summary is at the end of the publication.
This document is the result of a combined effort by the following staff members of the Research Division: Denise Huntley Adams, Dee Atkinson, Cindy Avrette, Susan Barham, Drupti Chauhan, Erika Churchill, Karen Cochrane-Brown, Judy Collier, Tim Dodge, Bill Gilkeson, Kory Goldsmith, Trina Griffin, Tim Hovis, Jeff Hudson, Sara Kamprath, Brad Krehely, Mariah Matheson, Theresa Matula, Kara McCraw, Jennifer McGinnis, Joe Moore, Jennifer Mundt, Shawn Parker, William Patterson, Howard Alan Pell, Giles S. Perry, Ben Popkin, Kelly Quick, Wendy Graf Ray, Barbara Riley, Steve Rose, and Susan Sitze. Heather Fennell is chief editor of this year’s publication, and Brenda Carter is co-editor. Dan Ettefagh, of the Bill Drafting Division, and Martha Walston, of the Fiscal Research Division, also contributed to this document. Lucy Anders, of the Research Division, also helped edit this document. The specific staff members contributing to each subject area are listed directly below the chapter heading for that area. Staff members' initials appear after their names and after each summary they contributed. If you would like further information regarding any legislation in the various summaries, please contact the Research Division Office at (919) 733-2578.
This document also is available on the Internet. Go to the General Assembly’s homepage at http://www.ncleg.net. Click on "Legislative Publications," then "Research Division," then "Summaries of Substantive Ratified Legislation." Each summary is hyperlinked to the final bill text, the bill history, and any applicable fiscal note.
I hope that this document will provide a useful source of information for the members of the General Assembly and the public in North Carolina. We would appreciate receiving any suggestions for this publication's improvement.
Yours truly,
O. Walker Reagan
Director of Research Guide to Staff Initials
(BC) Brenda Carter
(BG) Bill Gilkeson
(BK) Brad Krehely
(BP) Ben Popkin
(BR) Barbara Riley
(CA) Cindy Avrette
(DA) Dee Atkinson
(DC) Drupti Chauhan
(DE) Dan Ettefagh
(DHA) Denise Huntley Adams
(EC) Erika Churchill
(GSP) Giles S. Perry
(HF) Heather Fennell
(HAP) Howard Alan Pell
(JC) Judy Collier
(JH) Jeff Hudson
(JLM) Jennifer McGinnis
(JHM) Joe Moore
(JM) Jennifer Mundt
(KCB) Karen Cochrane-Brown
(KG) Kory Goldsmith
(KM) Kara McCraw
(KQ) Kelly Quick
(MM) Mariah Matheson
(MW) Martha Walston
(SB) Susan Barham
(SK) Sara Kamprath
(SP) Shawn Parker
(SR) Steve Rose
(SS) Susan Sitze
(TD) Tim Dodge
(TG) Trina Griffin
(TH) Tim Hovis
(TM) Theresa Matula
(WGR) Wendy Graf Ray
(WP) William Patterson i
TABLE OF CONTENTS
CHAPTER 1: AGRICULTURE AND WILDLIFE...................................................... 1
ENACTED LEGISLATION ................................................................................................ 1
STUDIES ........................................................................................................................ 3
CHAPTER 2: ALCOHOLIC BEVERAGE CONTROL ............................................. 5
ENACTED LEGISLATION ................................................................................................ 5
CHAPTER 3: CHILDREN AND FAMILIES ............................................................. 11
ENACTED LEGISLATION .............................................................................................. 11
STUDIES ...................................................................................................................... 13
CHAPTER 4: CIVIL LAW AND PROCEDURE....................................................... 15
ENACTED LEGISLATION .............................................................................................. 15
STUDIES ...................................................................................................................... 15
CHAPTER 5: COMMERCIAL LAW AND CONSUMER PROTECTION ........... 17
ENACTED LEGISLATION .............................................................................................. 17
STUDIES ...................................................................................................................... 20
Legislative Research Commission (LRC) ............................................................... 20
New/Independent Studies/Commissions.................................................................. 21
CHAPTER 6: CONSTITUTION AND ELECTIONS................................................ 23
ENACTED LEGISLATION .............................................................................................. 23
CHAPTER 7: COURTS, JUSTICE, AND CORRECTIONS .................................... 31
ENACTED LEGISLATION .............................................................................................. 31
Referrals to Existing Commissions/Committees ..................................................... 34
CHAPTER 8: CRIMINAL LAW AND PROCEDURE ............................................. 37
ENACTED LEGISLATION .............................................................................................. 37
CHAPTER 9: EDUCATION ........................................................................................ 43
ENACTED LEGISLATION .............................................................................................. 43
Public Schools ......................................................................................................... 43
Higher Education .................................................................................................... 56
Community Colleges ............................................................................................... 57
Universities ............................................................................................................. 60
STUDIES ...................................................................................................................... 64
Legislative Research Commission (LRC) ............................................................... 64
New/Independent Studies/Commissions.................................................................. 64
Referrals to Existing Commissions/Committees ..................................................... 65
Referrals to Departments, Agencies, Etc. ............................................................... 65 ii
CHAPTER 10: ENVIRONMENT AND NATURAL RESOURCES ........................ 69
ENACTED LEGISLATION .............................................................................................. 69
Environmental Health ............................................................................................. 69
Fisheries .................................................................................................................. 69
Miscellaneous ......................................................................................................... 70
Solid/Hazardous Waste ........................................................................................... 74
Water Quality/Quantity/Groundwater .................................................................... 77
Zoning and Development ........................................................................................ 81
STUDIES ...................................................................................................................... 82
New/Independent Studies/Commissions.................................................................. 82
Referrals to Existing Commissions/Committees ..................................................... 83
Referrals to Departments, Agencies, Etc. ............................................................... 86
CHAPTER 11: FINANCE ............................................................................................ 89
ENACTED LEGISLATION .............................................................................................. 89
STUDIES ...................................................................................................................... 95
Referrals to Existing Commissions/Committees ..................................................... 95
CHAPTER 12: HEALTH AND HUMAN SERVICES .............................................. 97
ENACTED LEGISLATION .............................................................................................. 97
STUDIES .................................................................................................................... 108
Legislative Research Commission (LRC) ............................................................. 108
Referrals to Departments, Agencies, Etc. ............................................................. 109
New/Independent Studies/Commissions................................................................ 113
CHAPTER 13: INSURANCE ..................................................................................... 115
ENACTED LEGISLATION ............................................................................................ 115
Appropriations Act of 2010 ................................................................................... 115
State Health Plan .................................................................................................. 115
Miscellaneous ....................................................................................................... 116
STUDIES .................................................................................................................... 119
Legislative Research Commission (LRC) ............................................................. 119
CHAPTER 14: LOCAL GOVERNMENT ................................................................ 121
ENACTED LEGISLATION ............................................................................................ 121
CHAPTER 15: MILITARY, VETERANS', AND INDIAN AFFAIRS .................. 123
ENACTED LEGISLATION ............................................................................................ 123
Legislative Research Commission (LRC) ............................................................. 125
CHAPTER 16: OCCUPATIONAL BOARDS AND LICENSING ......................... 127
ENACTED LEGISLATION ............................................................................................ 127
STUDIES .................................................................................................................... 129
Legislative Research Commission (LRC) ............................................................. 129
Referrals to Departments, Agencies, Etc. ............................................................. 129 iii
CHAPTER 17: PROPERTY, TRUSTS, AND ESTATES ....................................... 131
ENACTED LEGISLATION ............................................................................................ 131
CHAPTER 18: RESOLUTIONS ................................................................................ 133
JOINT RESOLUTIONS .................................................................................................. 133
CHAPTER 19: RETIREMENT ................................................................................. 137
ENACTED LEGISLATION ............................................................................................ 137
CHAPTER 20: STATE GOVERNMENT ................................................................. 139
ENACTED LEGISLATION ............................................................................................ 139
STUDIES .................................................................................................................... 141
CHAPTER 21: TRANSPORTATION ....................................................................... 145
ENACTED LEGISLATION ............................................................................................ 145
STUDIES .................................................................................................................... 151
New/Independent Studies/Commissions................................................................ 151
Referrals to Existing Commissions/Committees ................................................... 151
Referrals to Departments, Agencies, Etc. ............................................................. 152
CHAPTER 22: UTILITIES ........................................................................................ 155
ENACTED LEGISLATION ............................................................................................ 155
STUDIES .................................................................................................................... 156
INDEX ............................................................................................................................ 157
iv
Chapter 1 Agriculture and Wildlife
Page 1
Chapter 1
Agriculture and Wildlife
Mariah Matheson (MM), Howard Alan Pell (HAP), Barbara Riley (BR), Steve Rose (SR)
Enacted Legislation
Improve Success of Fishery Management Plans
S.L. 2010-13 (HB 1713). See Environment and Natural Resources.
Fishery Management Plan Supplements
S.L. 2010-15 (HB 1710). See Environment and Natural Resources.
Winston-Salem/Ashe Fox Trapping/Greene Hunting
S.L. 2010-82 (HB 1893) amends the fox trapping laws for Winston-Salem and Ashe County, and repeals certain hunting laws in Greene County.
Winston-Salem
The act provides an open season for the taking of foxes by trapping with cages in the city of Winston-Salem. Trapping with cages will be allowed only during the trapping season set by the Wildlife Resource Commission each year. There are no tagging requirements before or after the sale of foxes taken and no season bag limits.
Ashe County
The act makes three changes to fox hunting in Ashe County:
 Extends the fox trapping season to November 1 through November 28.
 Removes specific requirements on leghold traps.
 Removes the previously set expiration date of September 30, 2010.
Greene County
The act repeals two older session laws concerning hunting in Greene County:
 Repeals Section 3 of S.L. 1975-219, which prohibited hunting foxes with firearms during the two week deer season, as the two week deer season no longer exists.
 Repeals Section 1 of S.L. 1987-132 and removes Greene County from S.L. 1985-471, which prohibits the use of firearms from or on a public road or right-of-way. Hunting from or on a public road or right-of-way in Greene County remains prohibited by S.L. 2006-12.
The act became effective July 9, 2010. (MM)
Animal Euthanasia Technicians
S.L. 2010-127 (HB 1741) was a recommendation of the General Statutes Commission. The act allows animal shelters owned, operated, or maintained by a unit of local government or under contract with a unit of local government to register with the North Carolina Department of Health and Human Services (DHHS) in order to obtain euthanasia drugs directly from the manufacturer. Shelters registering with DHHS also will be required to register with the federal Drug Enforcement Agency. The persons who may order euthanasia drugs for a shelter are limited to the shelter manager, chief operating officer, or a licensed veterinarian. Any properly certified animal euthanasia technicians may administer the drugs to dogs and cats lawfully held by the shelter, but only on the premises of the shelter. Chapter 1 Agriculture and Wildlife
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The act clarifies the Board of Agriculture's authority to adopt rules for the certification of a euthanasia technicians. Grounds for disciplinary actions include violation of the Animal Welfare Act or the Board’s rules, conviction of any felony or lesser offense involving animal cruelty or related to being a euthanasia technician, falsifying an application, or otherwise becoming ineligible for certification. The Department of Agriculture and Consumer Services (DACS) is authorized to deny, revoke, or suspend a euthanasia technician’s certification for conviction of a drug-related felony even if the Board has not included that ground in its rules. The act also requires applicants for certification as a euthanasia technician to provide the DACS with fingerprints and consent for the DACS to obtain a criminal record check from the Department of Justice. Refusal is grounds to deny the application. The Department of Justice is authorized to provide criminal record checks to DACS for applicants for certification as a euthanasia technician and to impose the requisite fee.
This act becomes effective October 1, 2010. (BR)
Suspension and Revocation of Fishing Licenses
S.L. 2010-145 (HB 1714). See Environment and Natural Resources.
Conserve and Protect Agricultural Water Resources
S.L. 2010-149 (HB 1748). See Environment and Natural Resources.
Spay and Neuter Account
S.L. 2010-152, Sec. 11.4 (SB 897, Sec. 11.4) transfers the Spay/Neuter Program and the Spay/Neuter Account from the Department of Health and Human Services to the Department of Agriculture and Consumer Services (Department). The section also:
 Eliminates the requirement that 20¢ of the rabies tag fee go to the Spay/Neuter Account.
 Increases the cost of the Animal Lovers special license plate by $10.
 Eliminates a provision that stated that if the total amount generated by the rabies tag fee allocation for rabies education and prevention (5¢ per tag) was less than $47,500, then the difference between the amount generated and $47,500 could be used from the Spay/Neuter Account for rabies education and prevention purposes.
 Changes a requirement that 20% of the Account shall be used to develop the statewide education program component of the Spay/Neuter Program. The amendment provides that the Department "may" use "up to" 20% for that purpose.
This section became effective July 1, 2010. (HAP)
Coyote Controls
S.L. 2010-156 (HB 1824) authorizes a person who has been issued a depredation permit for coyotes to use a Collarum™ trap, or similar trap approved by the Wildlife Resources Commission (WRC), solely for the purpose of taking coyotes under that permit. The person authorized to use these traps under the depredation permit is required to provide to the Commission information related to the effectiveness and efficiency of the trap. To minimize the risk of harm to non-targeted species, any trap set must be attended daily and any non-target animal captured must be released.
The provisions regarding use of the traps becomes effective October 1, 2010. Livestock and poultry owners will be issued a depredation permit for coyotes upon request, and the WRC is directed to adopt rules to implement the provision on or before that date.
The remainder of this act became effective on July 22, 2010. (MM) Chapter 1 Agriculture and Wildlife
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Studies
Fur-Bearer and Fox Management
S.L. 2010-152, Sec. 2.9 (SB 900, Sec. 2.9) authorizes the Legislative Research Commission to study the effectiveness of the North Carolina Wildlife Resources Commission's implementation of laws relating to its capability for studying fox and fur-bearer population, implementation of management methods, and imposition of controls designed to produce optimum fox and fur-bearer populations in the various areas of the State.
This section became effective July 22, 2010. (HAP)
Ownerless Dogs and Cats/Commercial Dog Breeding
S.L. 2010-152, Sec. 2.12 (SB 900, Sec. 2.12) authorizes the Legislative Research Commission to study issues related to ownerless dogs and cats, and the State's role in ensuring the humane treatment of dogs and cats by breeders, shelters, and other facilities that house dogs and cats.
This section became effective July 22, 2010. (SR)
Insurance Coverage for Fresh Produce Growers
S.L. 2010-152, Sec. 2.15 (SB 900, Sec. 2.15) authorizes the Legislative Research Commission to study the issue of adequate insurance coverage options for fresh produce growers.
This section became effective July 22, 2010. (BR)
Study Impact of Exempting Wildlife Resources Commission and Marine Fisheries Commission from the Legislative Disapproval Process
S.L. 2010-152, Sec. 11.1 (SB 900, Sec. 11.1) authorizes the Joint Legislative Administrative Procedure Oversight Committee to study the impact of exempting the Wildlife Resources Commission and the Marine Fisheries Commission from the legislative disapproval process under the Administrative Procedure Act. In conducting the study, the Committee may consider the number of bills introduced since 2003 to disapprove rules adopted by either of the two Commissions, the effect of the delayed effective dates on the enforcement capabilities of the two Commissions, and alternatives available to the public for objecting to rules adopted by either of the two Commissions. The Joint Legislative Administrative Procedure Oversight Committee may report its findings and recommendations to the 2011 General Assembly.
This section became effective July 22, 2010. (SR)
Extend the North Carolina Zoological Park Funding and Organization Study Committee
S.L. 2010-152, Part XXI (SB 900, Part XXI). See Environment and Natural Resources. Chapter 2 Agriculture and Wildlife
Page 4
Chapter 2 Alcoholic Beverage Control
Page 5
Chapter 2
Alcoholic Beverage Control
Brenda Carter (BC), Kelly Quick (KQ), Susan Sitze (SS)
Enacted Legislation
Modernization of the State ABC System
S.L. 2010-122 (HB 1717) makes a number of changes to the State's ABC laws, many of which were recommended by a Joint Legislative Study Committee on Alcoholic Beverage Control issues.
Ethics. – The act makes it unlawful for contractors or suppliers who have or seek to have a contract with the ABC Commission (Commission) or local ABC board to make gifts or to give favors to any Commission or local board officers or employees and also unlawful for an officer or employee to accept such gifts. The act makes the Commission subject to the State Ethics Act, which prohibits the use of public position for private gain, prohibits certain gifts and other compensation, prohibits the use of information for private gain, and sets other rules of conduct for public servants. The act provides specific guidelines pertaining to conflicts of interest for local ABC boards – prohibiting a local board member from knowingly using his or her position in a manner that would result in financial benefit to the local board member, to his or her spouse or near relative, or to any business with which the local board member is associated. The act prohibits a local board member from improperly using or disclosing any confidential information, and imposes an affirmative duty on every local board member to promptly disclose in writing to the local board any actual or potential conflict of interest.
Each local ABC board must adopt a policy containing a code of ethics consistent with statutory provisions concerning conflicts of interests and gifts. Each local board member must receive a minimum of 2 hours of ethics education within 12 months after initial appointment to the board, and again within 12 months after each subsequent appointment to the office. The education may be provided by the Commission or by some other qualified source approved by the Commission. A local board may require appropriate ethics training and education for its employees. The Commission is required to develop a model ethics polity that local ABC boards may adopt in compliance with the requirements of this act.
Performance Standards. – The act requires the Commission to establish performance standards, and to ensure that all local boards comply with those standards by conducting regular or special audits, performance evaluations, monitoring ABC law enforcement efforts, or taking other measures including inspections by Commission auditors or alcohol law enforcement agents. When a local board fails to meet established performance standards, the Commission must meet with the chair of the local board and the appointing authority and issue a statement of findings. The appointing authority will, in consultation with the Commission, develop and deliver a performance improvement plan to the local board. The plan will include recommendations for improved performance, and state a period of time in which improvements are to occur and what actions will be taken by the Commission if performance standards are not met within the prescribed time limits. The appointing authority may allow no more than 12 months for the local board to implement and show improvement under the plan; however, upon a showing of good cause and in consultation with the Commission, the appointing authority may allow up to an additional six-month period of time. If the Commission determines that the established performance standards cannot be met after a performance improvement plan has been implemented and adequate time has been given, the Commission must take appropriate action to avoid insolvency. The Commission has authority to close the local board or one or more of its stores, or to merge the local board with another local board in order to maintain solvency. The Chapter 2 Alcoholic Beverage Control
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Commission also has authority to seize the assets of the local board and liquidate assets necessary to satisfy debt and maintain solvency of the local board.
The act gives the Commission authority to adopt rules to establish the performance standards for local boards, including standards that address enforcement of ABC laws, store appearance, operating efficiency, solvency, and customer service. The Commission also has authority to adopt rules setting mandatory training requirements for local board members, finance officers, and general managers, and to provide for the purchase of liquor from another ABC board by mixed beverage permittees when an ABC system becomes insolvent or closes. Local ABC boards must comply with all rules adopted by the Commission pursuant to its authority, and meet all standards set by the Commission for performance and training. Failure to comply with Commission rules will be grounds for removal.
ABC Law Enforcement. – The act limits the number of officers that a contracting law enforcement agency may designate to conduct inspections of ABC-licensed premises. Under existing law, instead of hiring local ABC officers a local board may contract to pay its enforcement funds to a local law enforcement agency for enforcement of the ABC laws within the agency's territorial jurisdiction. Officers of contracting law enforcement agencies have the same authority to inspect that an ABC officer employed by that local board would have, including viewing the entire premises and examining the books and records of the permittee. The act requires that a contracting law enforcement agency designate not more than five officers to conduct ABC inspections. The act preserves pre-existing local acts applicable to Greensboro and Charlotte.
The act requires local board ABC officers and law enforcement agencies subject to enforcement agreements with a local board to provide monthly reports to the local board, including information on the number of arrests made for ABC law and controlled substance violations and other violations at ABC-permitted outlets and other locations, the number of agencies assisted with ABC law or controlled substance related matters, and the number of alcohol education and responsible server programs presented. The local board must submit a copy of the report to its appointing authority and to the Commission, and the Commission will publish the information on a public Internet website. The reporting requirements become effective January 1, 2011.
The act makes a conforming change to the law pertaining to local ABC officers, making it clear that designated officers of agencies that contract with local boards for enforcement of the ABC laws are subject to statutory provisions concerning discharge from those duties.
ABC Elections. – The act increases the threshold for cities to qualify for an ABC store election by requiring that a city have at least 1,000 registered voters. The previous threshold was 500 registered voters.
The act allows any city that has at least 500 registered voters to hold a mixed beverage election. It eliminates a requirement that the city already operate a city ABC store in order to hold the mixed beverage election or if not, the county either operates an ABC store or has already held a mixed beverage election and the vote was against the sale of mixed beverages.
Local ABC Boards. – The act provides that a local ABC board may consist of three or five members and provides for staggered terms.
Mission: The act defines the mission of local ABC boards and their employees: Controlling the sale of spirituous liquor and promoting customer-friendly, modern, and efficient stores.
Compensation: The act limits the compensation of local ABC board members to not more than $150 per meeting, unless a different level of monetary compensation is approved by the board's appointing authority. If a different level of compensation is approved, the appointing authority is required to provide written notice to the Commission.
The act limits the compensation of general managers of local ABC boards. The salary authorized for the board's general manager may not exceed the salary authorized by the General Assembly for the clerk of superior court of the county in which the appointing authority was originally incorporated. A different level of monetary compensation may be approved by the board's appointing authority. If a different level of compensation is approved, the appointing Chapter 2 Alcoholic Beverage Control
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authority must provide written notice to the Commission. No employee of a local board may receive a salary in excess of the amount authorized for the salary of the general manager. The salary provisions become effective October 1, 2010, and apply to general managers and employees hired on or after that date.
Members and employees of local ABC boards may be reimbursed for travel on official business in accordance with the statutory travel allowances of State officers and employees. With approval of the appointing authority, a local board may adopt a travel policy that conforms to the travel policy of the appointing authority. The local board must annually provide to the Commission a copy of its travel policy along with the appointing authority's written confirmation of approval. Excess expenses not covered by the local board's travel policy may be paid only with written authorization of the appointing authority's finance officer, and the local board must submit a copy of the authorization to the Commission within 30 days of approval.
Bonding: The act increases the minimum amount of the bond required for local ABC board members and for the employees designated as the general manager or finance officer of the local board, raising it from $5,000 to $50,000. No board member will be exempt from the requirement, and the appointing authority may require a higher bond amount for any board member or employee who handles board funds. The act also increases the minimum amount of the bond required for ABC store managers, raising it from $5,000 to $50,000. An appointing authority may require a bond that exceeds the minimum amount.
Nepotism: The act prohibits members of an immediate family or members of the same household from being employed within a local board if the employment will result in one family or household member supervising another, or if one family or household member will occupy a position that has influence over the employment, promotion, or salary administration of another. The provision applies to local board members and employees. The policy becomes effective October 1, 2010, and applies to employees hired on or after that date.
The provisions regarding the appointment and organization of local ABC boards become effective October 1, 2011, and are applicable to all local ABC boards, notwithstanding any local acts that may provide otherwise.
Financial Operations of Local Boards. – The finance officer is the person responsible for keeping the accounts of the local board, including receiving and depositing receipts and disbursing funds. The general manager is the person responsible for the oversight of daily operations of the ABC system. The act requires the local board to designate an employee other than the general manager to be the finance officer of the local board, and sets out the duties and powers of the finance officer. For good cause shown, the Commission may allow the board's general manager also to be the finance officer.
A local board must operate under an annual balanced budget in accordance with provisions in the act. All monies received and expended by a local board must be included in the budget, and no local board may expend any monies except in accordance with the budget. The general manager of the local board, as budget officer, will prepare a budget for consideration by the local board. The proposed budget must be submitted to the local board, its appointing authority, and the Commission by June 1 and a copy made available for public inspection. Before adopting the budget, the board must hold a public hearing. The act establishes specific directions and limitations that a local board must comply with in adopting its budget. Once the budget is adopted, it must be filed with the board's finance officer and budget officer, the board's appointing authority, and the Commission. The act provides for amendments to an adopted budget and for an interim budget in case adoption of the budget is delayed until after the start of the fiscal year. Each local board must establish and maintain an accounting system designed to show in detail its assets, liabilities, revenues, and expenditures. The act contains specific provisions relative to incurring obligations, disbursements, and local board approval of bills, invoices, or claims. All checks or drafts must be signed by the finance officer or a properly designated deputy finance officer, and countersigned by the chair of the local board or the general manager, except where the requirement for dual signatures is waived by the Commission. Audits and reports currently required to be submitted to the Commission also must Chapter 2 Alcoholic Beverage Control
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be submitted to the local board's appointing authority. The act gives the Commission specific authority to inquire into and investigate the internal control procedures of a local board, and to require any modifications necessary or desirable to prevent the embezzlement or mishandling of public monies. The finance officer and sureties on the official bond will be liable for any sums committed or disbursed in violation of the law. The provisions pertaining to financial operations of local boards become effective May 1, 2011, and apply to local board fiscal years beginning July 1, 2011. The provisions apply to all local boards, notwithstanding any local acts.
Removal of Board Members. – The act prohibits the Commission or its individual members from attempting to coerce any appointing authority to appoint a particular person as a member of a local board, or attempting to coerce a local board to employ a particular applicant. It gives the Commission authority to remove any member or employee of a local board for disqualification under the law, violation of the ABC laws, failure to complete required training, or engaging in conduct constituting moral turpitude or which brings the local board of the ABC system into disrepute. The act sets out a removal process that requires written findings of fact upon which the decision for removal is based, and provides for an informal removal hearing before the Commission. The Commission has authority to discharge the board member or employee if two-thirds of the Commission's members vote for removal. The Commission has the sole power, in its discretion, to determine if cause exists for removal of a local board member or employee who has requested a hearing before the Commission, and the Commission's decision is final. The local board member or employee may appeal the Commission's final decision to the Court of Appeals. The standard of review is abuse of discretion, and the sole remedy is reinstatement with back pay. Awards for back pay will be paid by the local board from which the board member or employee was removed. These provisions apply to all local boards.
The act also amends the law concerning judicial authority to remove from office or discharge from employment any Commission or local board member or employee, or any ALE agent who violates the State's alcohol laws or commits any felony. The act makes the discharge provision applicable to local law enforcement officers who serve as the designated officer of an agency which holds a contract to enforce the ABC laws for a local board, giving the judge authority to prohibit the officer from being designated as an officer that enforces the ABC law for a period up to three years.
Wineries. – The act amends the law concerning the obligations of the purchaser of a winery, making it clear that the purchaser as well as any successor to the rights of a winery is obligated to all the terms and conditions of an agreement in effect on the date of the purchase or other acquisition of the right to distribute a brand. This provision became effective September 15, 2010, and applies to all existing franchise agreements. A supplier's shipment of wine to a wholesaler in this State following the effective date will constitute acceptance by the supplier of the terms of the act and be incorporated into the agreement between the supplier and wholesaler. The provision will not apply to any administrative action pending before the Commission or to pending litigation or claims that accrued before September 15, 2010.
The act also changes the definition of a winery for purposes of the Wine Franchise Act. Under existing law, a winery means the holder of an unfortified winery permit, fortified winery permit, limited winery permit, or nonresident wine vendor permit who sells at least 1,000 cases of wine in North Carolina each year; the act increases the number of cases from 1,000 cases annually to 1,250 cases annually. This provision became effective September 15, 2010.
Occupational Licensing Board Change. – The act creates an exception to the law that prohibits occupational licensing boards from requiring that an individual be more than 18 years of age as a condition for receiving a license. The exception applies to certifications issued by the Criminal Justice Education and Training Standards Commission and the North Carolina Sheriff's Education and Training Standards Commission. This provision became effective when the act became law on July 21, 2010.
Rowan-Kannapolis ABC Board. – The act provides for the appointment of three members to the Rowan Kannapolis ABC Board. The Rowan County Board of Commissioners, the Kannapolis City Council, and the Salisbury City Council each will appoint one member of the ABC Chapter 2 Alcoholic Beverage Control
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board. This provision was effective when the act became law on July 21, 2010, and applies to appointments and vacancies occurring on or after that date.
This act becomes effective October 1, 2010, except as otherwise noted. (BC)
Promote North Carolina Distilled Spirits
S.L. 2010-152, Sec. 14.12 (SB 897, Sec. 14.12) requires ABC stores to display spirits distilled in North Carolina in an area dedicated solely to North Carolina products. This section also provides for the issuance of a spirituous liquor tasting permit to the holder of an authorized distillery permit. The distillery may conduct a consumer tasting event on the premises of the distillery subject to the following conditions:
 Any person pouring spirituous liquor at a tasting must be an employee of the distillery and at least 21 years of age.
 The person pouring the spirituous liquor is responsible for checking the identification of patrons being served at the tasting, and samples shall not be offered to, or allowed to be consumed by, any person under the legal age for consuming spirituous liquor.
 Each consumer is limited to tasting samples of 0.25 ounce of each spirituous liquor which total no more than 1.5 ounces of spirituous liquor in any calendar day.
 The consumer is not charged for any spirituous liquor tasting sample.
 The spirituous liquor used in the consumer tasting event is distilled at the distillery where the event is being held.
 A consumer tasting event is not allowed when the sale of spirituous liquor is otherwise prohibited.
This section becomes effective October 1, 2010. (BC) Chapter 2 Alcoholic Beverage Control
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Chapter 3 Children and Families
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Chapter 3
Children and Families
Drupti Chauhan (DC), Wendy Graf Ray (WGR), Susan Sitze (SS)
Enacted Legislation
Protect Victims/Domestic Violence Shelters
S.L. 2010-5 (SB 140) amends the laws pertaining to domestic violence protective orders to make it a Class H felony for a person subject to an order to enter or remain on the premises of a shelter where the protected party is residing. The act also extends limited immunity from civil liability to persons associated with domestic violence protective shelters when there are tortious acts committed on shelter grounds.
Violation of a valid domestic violence protective order is generally a Class A1 misdemeanor. The law provides for higher penalties under certain circumstances. This act provides for aggravated penalties under certain circumstances when a person violates a valid protective order. If a person subject to a valid protective order enters a property used as a safe haven or domestic violence shelter, and is in violation of the order, then the violation is a Class H felony. The offense does not require that any parties protected by the protective order be present on the property.
The act also amends the law to provide that no shelter or person associated with the shelter is liable in tort to a shelter client or any other person on the premises, for any harm that results from the tortious conduct of a perpetrator. This applies where the tortious conduct is committed on the premises of the shelter, and the perpetrator is not a person associated with the shelter. The protection provided by this immunity does not extend to gross negligence, wanton conduct, or intentional wrongdoing on the part of the shelter or person associated with the shelter.
The provision of this act that makes it a Class H felony for a person who is the subject of a protective order to trespass on shelter premises where the protected party resides becomes effective December 1, 2010, and applies to offenses committed on or after that date. The remainder of the act became effective June 7, 2010. (WGR)
Attorney Fees/Alimony
S.L. 2010-14 (SB 59) amends the statute allowing a court to award reasonable attorney fees in actions for alimony or postseparation support. The act deletes language requiring the fees to be "for the benefit of" the applying spouse. The act addresses an issue raised in a North Carolina Supreme Court case where the Court held that attorney fees could not be awarded to a defendant spouse who was represented by pro bono counsel, because the fees were for the benefit of counsel and not the spouse. A two-justice dissenting opinion argued that this was not the intent of the General Assembly and maintained a broader, less restrictive interpretation of the phrase "for the benefit of" was required. This act deletes the language in question from the statute, eliminating any confusion over the interpretation of the phrase.
This act becomes effective October 1, 2010, and applies to fees for services rendered on or after that date. (WGR) Chapter 3 Children and Families
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Responsible Individuals List/Abuse and Neglect
S.L. 2010-90 (SB 567) requires that an individual be given an opportunity for notice and judicial review prior to being placed on a list of individuals determined to be responsible for the abuse or serious neglect of children. The act is in response to a recent North Carolina Court of Appeals decision that declared the prior process for placement on and expunction from the list to be unconstitutional.
In 2005, the Department of Health and Human Services (DHHS) was required to maintain a list of individuals determined to be responsible for the abuse or serious neglect of children, the responsible individuals list (RIL). DHHS is permitted to provide information from the RIL to child care institutions, child placing agencies, group home facilities, and other providers of foster care, child care, or adoption services that need to determine the fitness of individuals to care for or adopt children. Prior to this act, an individual was placed on the RIL after an investigative assessment resulted in a determination of abuse or serious neglect. The investigative assessment did not provide for notice to, or an opportunity to be heard by, the individual. After placement on the list, the individual was permitted to request that the individual's name be expunged from the RIL. In the case of In re W.B.M., 690 S.E.2d 41 (N.C. App. 2010), the North Carolina Court of Appeals considered a challenge to the procedure for placing an individual on the RIL. The Court held that the statutory RIL procedures were unconstitutional and violated the individual's due process rights.
This act eliminates the prior expunction process for individuals placed on the RIL, and instead creates a process for judicial review prior to the individual being placed on the RIL, which includes the following provisions:
 An individual identified as a responsible individual may be placed on the RIL only after one of the following:
 The individual was properly notified of the determination and failed to file a petition for judicial review in a timely manner.
 The court determines that the individual is a responsible individual as a result of a hearing either on the individual's petition for judicial review, or on a juvenile petition that alleges and seeks a determination that the individual is a responsible person.
 The individual is criminally convicted as a result of the same incident.
 The identified individual must be given notice that, unless the individual petitions for judicial review, the individual's name will be placed on the RIL.
 The individual is required to file for judicial review within 15 days of receipt of the director's determination. The standard of review for the hearing is a preponderance of the evidence of abuse or serious neglect and of the identification of the individual. The director, upon receipt of a notice of hearing for judicial review, is required to review the information and, if after the review determines there is not sufficient evidence, must prepare a written statement and give notice to the individual and the court, cancelling the hearing.
 The act defines serious neglect as conduct, behavior, or inaction of the juvenile's parent, guardian, custodian, or caretaker that evidences a disregard of consequences of such magnitude that the conduct, behavior, or inaction constitutes an unequivocal danger to the juvenile's health, welfare, or safety, but does not constitute abuse.
This act became effective July 11, 2010. (WGR)
Expand Access/Confidential Intermediaries
S.L. 2010-116 (HB 1463) expands access to confidential intermediary services from an adoption agency for facilitation of contact or to obtain identifying adoption information. It also Chapter 3 Children and Families
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allows an agency acting as a confidential intermediary to obtain a copy of a death certificate of the person who is the subject of the search and deliver it to the person requesting services.
In North Carolina, adoption records are closed. The law provides that, with certain exceptions, no one may release a record that would lead directly to the identity of an adoptee, an adoptive parent of an adoptee, an adoptee's parent at birth, or an adoptee's birth sibling or grandparent. Exceptions are available through a court order, through voluntary consent, or through the services of a confidential intermediary. To facilitate contact or share the information, the confidential intermediary must have the written consent of all parties.
This act amends and expands the law pertaining to confidential intermediaries as follows:
Definition of "confidential intermediary". – The act amends the definition of "confidential intermediary" to define the term as an agency (licensed child placing agency or a county department of social services) that may act as a third party to facilitate the sharing of information authorized by statute.
Definition of "adult". – The act deletes the provision that defined "adult" as someone 21 or older for purposes of the provisions relating to the use of confidential intermediaries. This means that the general definition of "adult" applies; an adult is 18 or older, or a person under 18 who either is married or legally emancipated.
New Categories of People Added. – Prior to this act, confidential intermediary services were available to a biological parent or adult adoptee or adult lineal descendant of a deceased adoptee. This act amends the list of people authorized to use confidential intermediary services to include the following:
 An adult biological sibling of an adult adoptee.
 An adult biological half sibling of an adult adoptee.
 An adult family member of a deceased biological parent.
 An adult family member of a deceased adoptee.
"Family member" is defined in the act as a spouse, child, stepchild, parent, stepparent, grandparent, or grandchild. If the biological parent is living, written consent of the biological parent is required before contact with or sharing of identifying information between any of the other specified parties. The act also allows an agency to act as a confidential intermediary for the guardian of a minor adoptee.
Access to Death Certificate. – The act provides that, if a confidential intermediary determines that the person who is the subject of the search is deceased, the agency may obtain a copy of the death certificate and deliver it to the person who requested the services.
This act becomes effective October 1, 2010. (WGR)
Improve Child Care Nutrition/Activity Standards
S.L. 2010-117 (HB 1726). See Health and Human Services.
Studies
Regulation of Beauty Pageants for Youth
S.L. 2010-152, Sec. 2.17 (SB 900, Sec. 2.17) authorizes the Legislative Research Commission to study the regulation of beauty pageants for youth under 13 years of age in North Carolina.
This section became effective July 22, 2010. (WGR) Chapter 3 Children and Families
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Chapter 4 Civil Law and Procedure
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Chapter 4
Civil Law and Procedure
Erika Churchill (EC), Tim Hovis (TH), Brad Krehely (BK)
Enacted Legislation
Homeowner and Homebuyer Protection Act
S.L. 2010-164 (SB 1015). See Commercial Law and Consumer Protection.
Studies
Study Comparative Negligence and Joint and Several Liability
S.L. 2010-152, Part XXXV (SB 900, Part XXXV) established the Joint Select Committee to Study the Adoption of Comparative Negligence and Abrogation of Joint and Several Liability. The Committee consists of ten members, including five Senators appointed by the President Pro Tempore of the Senate, and five members of the House of Representatives appointed by the Speaker of the House of Representatives. The Committee must study issues involving the adoption of comparative negligence, the abrogation of joint and several liability, and other issues related to tort liability. The Committee may make a final report, including any proposed legislation, to the 2011 General Assembly upon its convening. The Committee terminates upon the filing of its final report or upon the convening of the 2011 General Assembly, whichever occurs first.
This part became effective July 22, 2010. (BK) Chapter 4 Civil Law and Procedure
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Chapter 5 Commercial Law and Consumer Protection
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Chapter 5
Commercial Law and Consumer Protection
Cindy Avrette (CA, Drupti Chauhan (DC), Karen Cochrane-Brown (KCB), Heather Fennell (HF),
Tim Hovis (TH), Jeff Hudson (JH), Brad Krehely (BK), William Patterson (WP)
Enacted Legislation
Amend Cemetery Act
S.L. 2010-102 (SB 18) makes several changes to the North Carolina Cemetery Act. The act prohibits the North Carolina Cemetery Commission from approving a change of control of a cemetery company until the applicant provides sufficient evidence that appropriate merchandise and preconstruction trust accounts are maintained, or performance bonds have been obtained in lieu of those accounts in an amount sufficient to cover all payments made by purchasers who have not received the purchased property and services. It provides that funds in a perpetual care trust account must be invested by the trustee in the same manner as other fiduciaries according to the prudent person rule in G.S. 32-71. The act requires a cemetery company to list the cost of opening and closing each grave space in its contracts, and prohibits a cemetery company from requiring a purchaser of a grave space or mausoleum to purchase a vault from a particular seller. The act increases from one to three years the extension that may be given to a cemetery company for completion of construction of mausoleums and belowground crypts. Finally, the act authorizes the creation of a study commission to study various issues related to the regulation of cemeteries under the North Carolina Cemetery Act.
The section of the act which authorizes the study commission became effective July 20, 2010. The remainder of the act becomes effective October 1, 2010. (KCB)
Homeowner and Homebuyer Protection Act
S.L. 2010-164 (SB 1015) provides greater protection to homeowners and homebuyers by restricting and/or regulating certain real estate practices.
Home Foreclosure Rescue Scams
The act prohibits foreclosure rescue transactions by anyone, for financial gain or with the expectation of financial gain, other than the transferor unless the transferee pays at least 50% of fair market value of the property when the property is transferred. A foreclosure rescue transaction is a transfer of residential real property, including a manufactured home, which includes all of the following:
 The real property is the principal residence of the transferor.
 The transferor is in default or foreclosure proceedings have been initiated against the property.
 The transferee makes representations that the transfer of the property will prevent foreclosure and enable the transferor to remain in the home.
 The transferor retains an interest in the property conveyed.
A foreclosure rescue transaction contract must be in writing and contain all of the terms to which the parties have agreed. A violation of the act is an unfair and deceptive practice under G.S. 75-1.1, however, an individual homeowner selling his or her primary residence is not subject to liability under G.S. 75-1.1.
Option to Purchase Contracts with Lease Agreements
The act enacts a new chapter to regulate option contracts containing an option to purchase real property which includes, is combined with, or is executed in conjunction with a Chapter 5 Commercial Law and Consumer Protection
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residential lease agreement. Every option contract must be in writing and contain all the terms agreed to by the parties, as well as certain terms specified in the statute. The seller must record a copy of the contract or a memorandum of the contract with the register of deeds of the county in which the property is located within five business days after the contract has been signed. If the contract is forfeited, the purchaser's equitable right of redemption can be extinguished by a mutual termination agreement or a court order. The purchaser's right to exercise the option cannot be forfeited unless a breach has occurred, and the purchaser must be given at least 30 days' notice of the default and intent to forfeit before action is taken. Also, the purchaser has the right to cure the default at least once in every 12-month period during the term of the lease. If the property is encumbered and the option seller defaults on the loan secured by the property, the purchaser may elect to exercise the option or cancel the contract and receive a refund of the money paid, minus an offset for the rental value and for any damages beyond normal wear and tear. A violation is an unfair trade practice under G.S. 75-1.1.
Contract for Deed
The act enacts a new chapter to regulate contracts for deed, in which a seller agrees to sell an interest in property to a purchaser, and the purchaser agrees to pay the purchase price in five or more payments, exclusive of the down payment; the seller retains the title to the property as security for the purchaser's obligation under the agreement. Every contract for deed must be in writing, signed by all parties, and contain all of the terms agreed to, as well as certain terms specified in the agreement. The seller must record a copy of the contract or a memorandum of the contract with the register of deeds of the county in which the property is located within five business days after the contract has been signed. If the contract is forfeited, the purchaser's equitable right of redemption can be extinguished by a mutual termination agreement or a court order. The purchaser's rights under the contract for deed cannot be forfeited unless a breach has occurred, and the purchaser must be given notice of the default and intent to forfeit before action is taken. The purchaser also must be given at least 30 days to cure the default. The notice of default and intent to forfeit must contain specific information, including a description of each default and an itemized statement of all payments in default, or for defaults not involving failure to pay money, the action required to cure the default. The notice must be delivered to the purchaser in a manner authorized for service of process in a civil action. At least once in every 12-month period, the seller must provide the purchaser with a statement of account.
A seller may not enter a contract for deed if the seller does not hold title to the property. If the seller's title is encumbered, the seller may enter a contract for deed only if one of the following conditions is met:
 The encumbrance was agreed to by the purchaser, in writing, to make improvements on the property.
 The encumbrance was placed on the property prior to the contract of deed, if the seller is a licensed general contractor, licensed manufactured home dealer, or licensed real estate broker who continues to make timely payments.
 The encumbrance was placed on the property prior to the contract of deed, if the seller is not a licensed general contractor, licensed manufactured home dealer, or licensed real estate broker, if the lien is attached only to the property sold to the purchaser, and the seller continues to make timely payments.
A seller may not charge a late fee in excess of 4% of the past due amount under a contract for deed. The late fee may not be charged until the payment is more than 15 days past due. A violation is an unfair trade practice under G.S. 75-1.1
This act becomes effective October 1, 2010, and applies to transactions entered on or after that date. (KCB)
Extend Emergency Foreclosure Program
S.L. 2010-168 (SB 1216) amends the Emergency Program to Reduce Home Foreclosures Act, and creates the State Home Foreclosure Prevention Trust Fund. Chapter 5 Commercial Law and Consumer Protection
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S.L. 2008-226 created an "Emergency Program to Reduce Home Foreclosures." The program established a system by which mortgage servicers are required to identify certain subprime loans that are in jeopardy of foreclosure and submit information on those loans to a database housed within the Administrative Office of the Courts (AOC). The Commissioner of Banks uses the information from the database to attempt to find solutions for homeowners to avoid foreclosure, and is authorized to extend the foreclosure process for up to 30 days in appropriate cases. The program became effective November 1, 2008, and was set to expire on October 31, 2010. Initially, the program applied only to subprime home loans that were originated between January 1, 2005, and December 31, 2007. This act makes the program applicable to all home loans in the State in which the borrower is facing foreclosure and extends the expiration date until May 31, 2013.
The act creates the State Home Foreclosure Prevention Trust Fund, to be managed and maintained by the Commissioner of Banks. It provides that upon filing the information required for the database, mortgage servicers are required to pay a fee of $75 to the Fund. The Fund can be used only for specified purposes related to implementing the Program. The Commissioner is given discretion to enter agreements with other State and federal programs aimed at foreclosure prevention.
The act amends the S.A.F.E. Mortgage Licensing Act to increase the fee for licensing a principal or branch office of a mortgage broker or mortgage lender from $125 to $300, to increase the branch office renewal fee from $125 to $300, and to increase the renewal fee for licensed mortgage loan originators from $67.50 to $125. The Commissioner of Banks is authorized, under the S.A.F.E. Mortgage Licensing Act, to charge a new administrative processing fee not to exceed $75.
In addition, the act amends the Predatory Lending law to exclude a portion of the upfront fees paid to the Federal Housing Administration, the Veterans Administration, or the United States Department of Agriculture from the calculation of the total amount of points and fees that can be charged on a home loan before it becomes a high cost loan. A loan becomes a high cost loan if the total amount charged as points and fees exceeds 5% of the total loan amount. Fees paid to a federal agency that guarantees or insures a loan are included in this calculation. The act excludes the portion of the fees paid to federal agencies, or for private mortgage insurance premiums that exceeds 1.25% of the total loan amount from the calculation of points and fees paid by the borrower. It also reduces the threshold for points and fees from 5% to 4%.
Provisions relating to the Emergency Program to Reduce Home Foreclosures become effective November 1, 2010, and expire May 31, 2013. Provisions relating to the S.A.F.E. Mortgage Licensing Act and the Predatory Lending Act, become effective September 1, 2010. The remainder of this act became effective August 2, 2010. (KCB)
Low-Profit Limited Liability Company
S.L. 2010-187 (SB 308) recognizes a new type of corporate designation for a limited liability company (LLC) that requires operation of the company in accordance with these three requirements:
 To accomplish one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B) of the Internal Revenue Code.
 To operate so that no significant purpose of the company is the production of income or the appreciation of property.
 To operate so that no purpose of the company is to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D) of the Internal Revenue Code.
A LLC that chooses to put these conditions on its operations by including them in its articles of organization and by operating in accordance with them may, under this act, call itself a Chapter 5 Commercial Law and Consumer Protection
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"low-profit limited liability company" and use the designation "L3C". Like a LLC, a L3C is subject to federal and State tax, and investments in a L3C are not tax deductible.
The formation of a L3C is designed to facilitate program-related investments (PRI) by private foundations. Private foundations must distribute at least 5% of their capital for charitable purposes to maintain their nonprofit status. Although foundations often expend these funds through grants, they also may meet the expenditure requirement with Internal Revenue Service-sanctioned PRIs. A PRI is an investment that supports charitable activities but may involve the potential return of capital. An example of a PRI is a loan, a loan guarantee, and an equity investment in a charitable organization. Foundations do not usually make PRIs without an IRS private letter ruling that the investment meets the IRS requirements as an acceptable PRI. The expense of obtaining a private letter ruling deters foundations from this form of investment. The founders of the L3C designation hope that the IRS or Congress will choose to treat an investment in a L3C as a PRI without the need for a private letter ruling, because the three requirements to form as a L3C mirror the IRS requirements for a PRI. Neither the IRS nor Congress has evidenced any movement on this issue.
This act became effective August 3, 2010. (CA)
No Foreclosure/Soldiers on Active Duty/Funds
S.L. 2010-190 (SB 1400) prohibits foreclosures under a power of sale during, or within 90 days after, a debtor's period of military service, and requires a foreclosing party to certify to the clerk that that the debtor is not on active military duty before a foreclosure hearing can be scheduled.
The prohibition applies to mortgagees, trustees, or other creditors attempting to exercise powers of sale contained in a mortgage or deed of trust, or provided by statute. For powers of sale pursuant to a mortgage or deed of trust, the prohibition applies only to mortgages or deeds of trust that originated prior to the debtor's period of military service. The debtor's rights under this section can be waived in writing by separate instrument executed during or after the debtor's period of military service.
The act also amends requires foreclosing parties to notify debtors that foreclosure may be prohibited if the debtor is on military duty, and requires the clerk to find that a power of sale foreclosure is not barred by this act before authorizing the foreclosure proceeding.
This act becomes effective January 1, 2011, and applies to foreclosures initiated on or after that date. (WP)
Studies
Legislative Research Commission (LRC)
Use of "Most Favored Nation" Clauses
S.L. 2010-152, Sec. 2.16 (SB 900, Sec. 2.16) authorizes the LRC to study the use of "Most Favored Nation" (MFN) clauses in contracts, including:
 The extent to which MFN clauses are included in contracts in the State and in the nation as a whole.
 The most common forms and elements of MFN clauses.
 The effect of inclusion of MFN clauses in contracts.
 The effect that prohibiting the use of MFN clauses in contracts has had in those states that have prohibited their use. Chapter 5 Commercial Law and Consumer Protection
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 Any other issue relating to the use or prohibition of MFN clauses that the LRC deems appropriate.
This section became effective July 22, 2010. (KCB)
New/Independent Studies/Commissions
Study Commission on Expansion of the Life Sciences Industry and Related Job Creation
S.L. 2010-152, Part XXXVII, Secs. 37.1 – 37.4 (SB 900, Part XXXVII, Secs. 37.1 – 37.4) establishes the Study Commission on the Expansion of the Life Sciences Industry and Related Job Creation. The Commission is authorized to examine issues related to:
 The need for additional sources of financing for life science companies to finance facilities and equipment for the manufacture, production, or warehousing of life science products and services in the State and other facilities for the production and delivery of life science products and services in the State.
 The legislative proposals contained in SB 580 (North Carolina Life Science Development Corporation Act) and HB 530 (Life Sciences Development Act) of the 2009-2010 legislative sessions.
The Commission is directed to make its final report together with any proposals to the General Assembly by February 1, 2011. The Commission terminates upon filing its final report or February 1, 2011, whichever is earlier.
This section became effective July 22, 2010. (KCB) Chapter 5 Commercial Law and Consumer Protection
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Chapter 6 Constitution and Elections
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Chapter 6
Constitution and Elections
Denise Huntley Adams (DHA), Erika Churchill (EC), Bill Gilkeson (BG), Kara McCraw (KM)
Note: For legislation affecting voting, the legislation cannot be implemented until it has received approval under Section 5 of the Voting Rights Act of 1965. Approval is most commonly obtained administratively from the United States Attorney General. This requirement applies to legislation affecting any of the 40 North Carolina counties covered by Section 5, including all Statewide legislation. Unless otherwise indicated, the effective date stated is the effective date as it is in the legislation. The act cannot be implemented until Voting Rights Act approval is obtained.
Enacted Legislation
No Felon as Sheriff*
S.L. 2010-49 (HB 1307) proposes to amend Section 2 of Article VII of the North Carolina Constitution to provide that no person convicted of a felony against this State, the United States, or another state is eligible to serve as Sheriff, whether or not that person has had citizenship rights restored under the law. "Convicted of a felony" includes the entry of a guilty plea; a verdict or finding of guilt by a jury, judge, magistrate, or other adjudicating body, tribunal, or official, either civilian or military; or a plea of no contest, nolo contendere, or the equivalent.
Currently, Section 8 of Article VI of the Constitution disqualifies a person from elective office generally if that person has been convicted of a felony and has not had citizenship rights restored according to law. Chapter 13 of the General Statutes provides that a felon's citizenship rights are automatically restored upon completion of their sentences.
Like all proposed amendments to the State Constitution, the one proposed in this act is subject to a statewide referendum. The act sets the referendum on November 2, 2010, the date of the general election.
If the voters approve the proposal, the amendment becomes effective upon the certification of the referendum results. (BG)
Designation of Uses of Campaign Funds
S.L. 2010-100 (HB 1136) authorizes the personal representative of a candidate who did not file a written designation for the permitted uses of remaining campaign funds to do so within 90 days of the date of death. The personal representative is limited to directing those funds to 501(c)(3) charitable organizations.
The bill amends the 2006 act that placed limits on the uses candidates and candidate campaign committees can make of the funds in their campaign accounts. The 2006 act provided that the funds in a campaign account at the time of a candidate's death would escheat to the State unless the candidate, before death, had filed a statement providing a different designation.
This act became law effective July 20, 2010. For any candidate campaign committee that was active status with the State Board of Elections on that date, the personal representative of the estate may file the written designation within 90 days of the day this act receives preclearance under Section 5 of the Voting Rights Act. (BG) Chapter 6 Constitution and Elections
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Limitation on the Use of Public Funds
S.L. 2010-114, Sec. 1.5 (HB 593, Sec. 1.5) prohibits counties, municipalities, and local boards of education from using public funds to endorse or oppose a referendum, election, or a particular candidate for elective office.
This section became effective July 20, 2010, and applies beginning with the 2010-2011 school year. (KM)
Government Ethics and Campaign Reform Act of 2010
S.L. 2010-169 (HB 961) made various changes to the campaign finance laws, public records laws, ethics laws, and lobbying laws as follows:
 Makes it unlawful for a member of the Council of State to coerce political contributions or support by threatening discipline or promising preferential treatment to the following groups of people: Persons doing or seeking to do business with the Council of State member's department; persons engaged in activities that are regulated or controlled by the Council of State member's department; or persons who have financial interests that may be affected substantially by the performance or nonperformance of the Council of State member's official duties. A violation is a Class 2 misdemeanor.
 Prohibits public officers or employees involved in making or administering a contract on behalf of a public agency from soliciting or receiving favors, services, and promises of future employment in exchange for recommending, influencing, or attempting to influence the award of the contract.
 Expands the prohibition on bribery of officials to include a prohibition on those who have filed a notice of candidacy for or have been nominated for such office.
 Provides that certain unlawful campaign contributions, including giving in the name of another, anonymous contributions, and contributions by corporations, business entities, labor unions, professional associations, or insurance companies to candidates or political committees or to compensate, reimburse, or indemnify an individual for money or property for making contributions or expenditures which total more than $10,000 per election are a Class I felony. This prohibition shall not apply to contributions by individuals with the lawful authority to act on behalf of another individual.
 Adds the State Board of Elections to the administrative hearing process for the purposes of investigations and audits required of the Board under Chapter 163 of the General Statutes.
 Mandates that the State Board of Elections create an easily searchable database to provide the public with access to the database to search by geographic location, occupation, employer, contributor, or contributee, within an election cycle and over a period of time as specified by the searcher.
 Codifies the Governor's Executive Order Number 4 to require the Office of State Budget and Management and Information Technology Services to build and maintain a single, searchable website and database on State spending for grants and contracts awarded in amounts in excess of $10,000. Information provided for each contract or grant shall include: The name of the entity receiving the award; the amount of the award; the location of the entity receiving the award; expected outcomes of the contract or grant, and specific deliverables required; and contact information for the responsible state government officer or administrator of the contract or grant.
 Adds the following as public servants: The Executive Director and Assistant Executive Director of the State Ethics Commission; the Director of the Office of State Chapter 6 Constitution and Elections
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Personnel; the State Controller; the Chief Information Officer and Deputy Chief Information Officers, Chief Financial Officers, and General Counsel of the Office of Information Technology; the Director of the State Museum of Art; the Executive Director of the Agency for Public Telecommunication; the Commissioner of Motor Vehicles; the Commissioner of Banks and Chief Deputy Commissioners of the Banking Commission; the Executive Director of the North Carolina Housing Finance Agency; and the Executive Director, Chief Financial Officer, and Chief Operating Officer of the North Carolina Turnpike Authority.
 Adds the Governor's Crime Commission as a covered board, which means its members are public servants under the State Government Ethics Act.
 Requires a covered person to file a statement of economic interest in the year following the year that a covered person resigns or does not file a notice of candidacy or petition for election.
 Makes various changes to the annual statement of economic interest required to be filed by covered persons, as follows:
 Removes the requirement that statements of economic interest be sworn.
 Permits any filing person to list just the initials of an unemancipated child in the statement of economic interest, and provide the full name of the child in a confidential document to the State Ethics Commission.
 Adds sole proprietorships to the list of business entities that must be listed on the statement of economic interest.
 Clarifies that the statement of economic interest should include the name of each business with which the filing person or filing person's immediate family is an employee, director, officer, partner, proprietor, member or manager, and identifies which of these businesses do business with the State.
 Adds a requirement that the statement of economic interest form include a question to list contributions to the appointing Council of State member totaling more than $1,000 in the preceding year.
 Adds a requirement that the statement of economic interest form include a yes/no question as to whether the filing person engaged in certain campaign related activities in the preceding calendar with the respect to or on behalf of the candidate or candidate campaign committee of the covered person who appointed the filing person. This requirement would apply only to specific filing persons.
These provisions become effective January 1, 2011, and apply to statements of economic interest filed on or after that date.
 Authorizes the Governor to adopt additional and supplemental ethics standards applicable to any gubernatorial appointee to any State board, commission, or similar public body, and to adopt minimum ethics standards applicable to any employee of a State agency. The Governor is required to publish those standards in the North Carolina Register and make them available to each subject appointee or employee.
 Clarifies that an indirect gift prohibited under the gift ban includes gifts where a designated individual is not the sole recipient.
 Mandates that rules adopted by the State Ethics Commission which do not follow the truncated rule-making procedure set out in statute are null, void, and without effect. Also defines rules as any Commission regulation, standard, or statement of general applicability that interprets an enactment by the General Assembly or Congress, a regulation adopted by a federal agency, or that describes the procedure or practice requirements of the Commission.
 Clarifies the definition of lobbyist so that the relationship between a lobbyist and a lobbyist principal is triggered only when the relationship includes payment, and changes the definition of a lobbyist to an individual who engages in lobbying for payment and meets certain criteria. Corresponding changes also are made to the Chapter 6 Constitution and Elections
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definition of lobbyist principal to clarify that a lobbyist principal is a person or governmental unit on whose behalf a lobbyist lobbies and who makes payment for that lobbying. Also requires lobbyist principals to annually report the cumulative combined totals of all payments for lobbying during the registration period, and for certain specific communications and activities used to lobby. These provisions become effective January 1, 2011, and apply to offenses committed on or after that date, and reports filed on or after that date.
 Requires the release of the following information previously held confidential in personnel records of employees of State government, local boards of education, community colleges, area mental health authorities, public health authorities, counties, cities, and water and sewer authorities:
 The date and amount of each salary change.
 The date and type of each promotion, demotion, transfer, or suspension, separation, or other change in position classification.
 The date and general description of the reasons for each promotion.
 The date and type of each dismissal, suspension, or demotion for disciplinary reasons.
 A copy of the written notice of final decision setting forth the specific acts or omissions for a dismissal.
These provisions become effective October 1, 2010.
 Requires the Secretary of State and the State Ethics Commission to publish annual statistics for complaints of violations of the lobbying law, including number of systematic reviews, number of complaints filed, number of apparent violations referred to a district attorney, number of complaints dismissed, and number and age of complaints pending. All civil fines, including the amount of the fine and the identity of the person or governmental unit against whom it was levied, must be public record.
 Exempts anything of value given or received in connection with seeking or hosting a national political party convention from all of the lobbying laws, including the gift ban and reporting provisions.
 Amends the access to public records law by requiring mediation of public records disputes. Voluntary mediation may be initiated prior to suit being filed, and mandatory mediation is required within 30 days from the filing of responsive pleadings with the clerk. The mediation:
 Is initiated by filing a request for mediation with the clerk of court in a county in which the action may be brought on a form prescribed by the Administrative Office of the Courts. Parties must be provided by the clerk with a list of certified mediators from which to select, and if a mediator cannot be agreed upon by the parties, the senior resident superior court judge must appoint a mediator.
 Must be conducted in accordance with the standards for mediated settlements of civil cases. Mediation may be waived if all parties agree and the mediator is so informed in writing. At the conclusion of mediation, the mediator must prepare and file a certification stating the date on which the mediation was concluded and the general results of the mediation.
 Does not preclude parties from seeking injunctive or other relief, including production of public records, prior to the scheduled mediation.
If a party successfully compels the disclosure of public records, the court must allow that party to recover its reasonable attorneys' fees. The court may not assess attorneys' fees against a governmental body or unit if the court finds the governmental body or unit acted in reasonable reliance on a court order, appellate decision, or opinion of the Attorney General. The Chapter 6 Constitution and Elections
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court may not assess fees against a public hospital if the court finds the action was brought by, or on behalf of, a competing health care provider to gain competitive advantage. These provisions become effective October 1, 2010, and apply to actions filed on or after that date.
 Clarifies that sworn complaints filed with the State Ethics Commission can allege violations of the Legislative Ethics Act or certain criminal provisions, and changes the timeframe within which the State Ethics Commission must send a copy of a complaint to the complainant from 30 days to 10 business days. Also changes the timeframe in which the State Ethics Commission must initiate a complaint from 60 days to 10 business days. Requires the State Ethics Commission to conclude a preliminary inquiry of an investigation within 20 business days and allows the Commission to dismiss a complaint that is determined to be frivolous or brought in bad faith.
 Prohibits a legislative employee from disclosing confidential information, and clarifies that a court's authority to compel the testimony of a legislative employee regarding confidential communications or matters related to the legislative process is limited by North Carolina's speech and debate clause, the common law of legislative immunity, and the statute related to the confidentiality of redistricting communications. This provision becomes effective October 1, 2010.
 Mandates the Legislative Ethics Committee to study the need for additional regulations of campaign contributions to State officials and candidates for State office by persons doing business with, or regulated by, the office held by the State official. The Committee also must study the statement of economic interest form required to be filed by covered persons to ensure the form accurately and informatively discloses the required information. The Committee must report its findings and recommendations to the 2011 General Assembly on or before April 1, 2011.
 Establishes the Public Funding of Council of State Elections Commission, with a total of ten members. Five of the members must be appointed by the Speaker of the House of Representatives, including a majority party member, a minority party member, a representative from the North Carolina Chamber, a representative of groups opposing public financing of elections, and an individual who has received public financing for a campaign. Five of the members must be appointed by the President Pro Tempore of the Senate, including a majority party member, a minority party member, an individual in business recommended by a business association other than the North Carolina Chamber, a representative of groups advocating for public financing of elections, and a representative of the North Carolina State Bar. The Commission must study issues related to continuation of public financing for Council of State elections, including examining the existing program, funding and financial needs, whether to expand the program to other Council of State offices, and related legal precedents and constitutional issues. The Commission must report no later than March 1, 2011, to the 2011 General Assembly.
 Makes technical and clarifying changes to the State Government Ethics Act and Lobbying laws.
This act became effective August 2, 2010, except as otherwise noted. Criminal penalties become effective December 1, 2010, and apply to offenses committed on or after that date. (DHA and KM)
Citizens United Response
S.L. 2010-170 (HB 748) makes various changes to the campaign finance statutes in response to the U.S. Supreme Court case, Citizens United v. Federal Election Commission. Chapter 6 Constitution and Elections
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In Citizens United v. Federal Election Commission, 558 U.S. 50 (2010), the U.S. Supreme Court held that the government may not suppress political speech based on the speaker's corporate identity. The Court struck down federal law which prohibited a corporation from making independent expenditures for express advocacy or electioneering communications. The Court did not address the question of whether corporations can be prohibited from making contributions. The Court upheld disclaimer and disclosure requirements for independent expenditures.
The act makes the following changes in response to the Supreme Court decision:
 Definitions. Adds several new definitions to Article 22A of Chapter 163, which covers the regulation of contributions and expenditures in political campaigns, including:
 Coordination and Coordinated expenditure: An expenditure made in concert or cooperation with, or at the request or suggestion of, a candidate, a candidate campaign committee, or the agent of the candidate or candidate campaign committee. An expenditure for the distribution of information relating to a candidate's campaign, positions, or policies that is obtained through publicly available resources is not considered a coordinated expenditure if it is not made at the request of a candidate, a candidate campaign committee, or the agent of the candidate or candidate campaign committee.
 Electioneering communication: Transfers definitions in Articles 22E and 22F of Chapter 163 into Article 22A of Chapter 163, with the following changes:
 Expands the application from statewide and General Assembly candidates to candidates for all offices.
 Covers communication aired or transmitted within 60 days before one-stop (early) voting begins in an election for that office, rather than 60 days before general election day, or 30 days before primary day. Early voting begins on the third Thursday before the election.
 Lowers the coverage threshold from 50,000 to 20,000 households for mass mailings and phone banks in a statewide election.
 Adds to the current exclusions from the definition of "electioneering communication" (1) public opinion polls conducted by a news medium or polling organization (excluding "push polls"), and (2) print communications by news media. "News medium" is as defined in GS 8-53.11, which gives testimonial privileges to journalists for news media.
 Disclosure of Independent Expenditures. Requires independent expenditures to be reported according to the same schedule required of political committees. For large last-minute activity – expenses of $5,000 or more incurred, or donations of $1,000 or more received, to further independent expenditures before an election but after the period covered by the last report due before that election – the act requires 48-hour reporting.
Current law requires the entity making the disclosure also to disclose donations to it of more than $100 for the purpose of furthering an independent expenditure or contribution. The act provides that a donation to the filer of the report is deemed to have been made to further the independent expenditure if it meets any of the following:
 The donor designates, requests, or suggests the donation be used for independent expenditures, and the filer agrees.
 The filer expressly solicits the donation from the donor for an independent expenditure.
 The filer and donor engage in substantial written or oral discussion regarding the donor making an independent expenditure.
 The donor or filer knew or had reason to know of the filer's intent to make independent expenditures or contributions with the transfer. Chapter 6 Constitution and Elections
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Donations are not deemed to be made to further an independent expenditure if the donation was a commercial transaction in the ordinary course of business, absent affirmative evidence that the amount was donated to further an independent expenditure. In determining the amount of a donation that was made to further any particular independent expenditure, any amount that was designated by the donor with respect to a different election than the election that is the subject of the independent expenditure covered by the report is excluded.
The act requires that reports of more than $5,000 in independent expenditures be filed electronically.
 Disclosure of Electioneering Communications. Every individual or person who incurs an expense for the direct costs of producing or airing electioneering communications aggregating in excess of $5,000 (down from $10,000) is required to file with the State Board of Elections a report which includes: The identification of any person(s) incurring the expense; the custodian of the books and accounts and the principal place of business of the person incurring the expense; the amount of each expense incurred; the elections to which each communication pertain; and the names and addresses of all entities that provided anything of value in an aggregate amount of $1,000 to further the electioneering communication.
The initial report must be filed with the Board no later than the 10th day following the day the individual or person incurs an expense for the direct costs of producing or airing an electioneering communication. The Board must require subsequent reporting on the same schedule as reporting required by political committees, including 48-hour reporting of large last-minute activity like that for independent expenditures. The act also requires disclosure of donors like that of independent expenditures, and requires electronic filing with the State Board if the expense incurred is greater than $5,000.
 Requirements for Media Outlets. Provides that every media outlet shall require written authorization for each independent expenditure or electioneering communication, similar to the current requirement for campaign expenditures. All written authorizations are considered public records and must be made available for inspection during the media outlet's normal business hours.
 Repeal of Prohibition on Independent Expenditures by Corporations, Etc. Repeals the prohibition on independent expenditures by corporations, business entities, labor unions, professional associations, and insurance companies to support or oppose the nomination or election of clearly identified candidates.
 Determination by State Board of Elections. Authorizes the Board to establish a process for determining whether a communication is an expenditure, independent expenditure, or electioneering communication prior to the airing or distribution of that communication when requested by an individual or person producing a communication. The responsibility for the determination may be delegated to the Executive Director of the Board. If the responsibility is delegated to the Executive Director, the process established by the Board shall require a written determination by the Executive Director to include stated findings and an opportunity for immediate appeal to the State Board of the determination by the Executive Director.
 Basic Disclosure on Ads. Amends the disclosure requirements for political advertisements to require that a print media, radio, or television advertisement supporting or opposing the nomination or election of one or more clearly identified candidates that constitutes an electioneering communication or independent expenditure must meet existing disclosure requirements for expenditures and contributions. Print media that is an independent expenditure opposing or supporting a clearly identified candidate must disclose the five largest donations to the sponsor within the six months prior to purchase of the ad, and the same Chapter 6 Constitution and Elections
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disclosure must be made for electioneering communications. Size requirements for TV disclosure is changed from 32 scan lines to 4% of vertical picture height.
 TV and Radio Ads. Requires television or radio advertisements which support or oppose the nomination or election of a clearly identified candidate sponsored by corporations with the purpose of promoting social, educational, or political ideas to include the following information:
 Television Ads: A legible on-screen listing indicating with which board of elections donor information may be found.
 Radio Ads: An aural disclosure indicating with which board of elections donor information may be found.
The act also requires electioneering communications on television and radio purchased by an individual to include the same sponsorship disclosures as an independent expenditure.
 No Write-ins in Nonpartisan Runoff. For cities using the nonpartisan election and runoff system, no space for write-in candidates shall be included on the runoff ballot. Effective January 1, 2011.
Except as noted, this act becomes effective upon preclearance under Section 5 of the Voting Rights Act. (EC)
Absentee Voting Changes
S.L. 2010-192 (HB 614) changes North Carolina's law on automatic transmission of absentee ballots to uniformed military personnel, so that an application for an absentee ballot will trigger transmission of ballots to the uniformed voter for all the elections during that calendar year.
The bill reverses a North Carolina law enacted in 2003 to conform to a 2002 federal change. The 2003 law provided that one application by a military person for an absentee ballot would trigger transmission of ballots in all elections through the second general election for federal office after the application is made. In 2009, Congress repealed its 2002 change. Evidence had appeared that sending ballots to the same address of a military person for two elections often resulted in ballots being sent to outdated addresses, since uniformed personnel are so often reassigned. The change in this act re-adapts North Carolina law to the second federal change.
This act became effective on August 4, 2010, but it applies only to applications made after the 2010 general election. The bill must be pre-cleared under Section 5 of the Voting Rights Act before it can be implemented. (BG) Chapter 7 Courts, Justice, and Corrections
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Chapter 7
Courts, Justice, and Corrections
Brenda Carter (BC), Erika Churchill (EC), Tim Hovis (TH), Jeff Hudson (JH)
Kara McCraw (KM), Howard Alan Pell (HAP), Kelly Quick (KQ),
Wendy Graf Ray (WGR), Susan Sitze (SS)
Enacted Legislation
Education for Prison Inmates
S.L. 2010-31, Sec. 8.3 (SB 897, Sec. 8.3). See Education.
Special Proceedings/Partition Filing Time Changes
S.L. 2010-97, Sec. 1 (SB 1242, Sec.1) amends the time requirements for filing pleadings in partition actions to allow for up to 30 additional days, and removes requirement for an affidavit when showing good cause why pleadings filing deadlines applicable to a special proceeding should be enlarged.
This act became effective July 20, 2010. (KQ)
Queries for Legal Status of Prisoners
S.L. 2010-97, Sec. 12 (SB 1242, Sec. 12) removes the requirement that queries regarding the legal status of prisoners be made through the Division of Criminal Information system, and instead requires that such queries be made directly to the federal Immigration and Customs Enforcement Division. The section also removes the requirement for annual reports to the Governor's Crime Commission by facilities on the number and results of the queries.
This section became effective July 20, 2010. (KM)
Modified Drug Treatment Court Probation Judgments
S.L. 2010-97, Sec. 13 (SB 1242, Sec. 13) clarifies that probation judgments modified after December 1, 2009, are subject to the exclusive jurisdiction of the superior court for hearings to revoke probation where the district court is supervising a drug treatment court probation judgment, and that the district court, with the consent of the chief district court judge and the senior resident superior court judge, may exercise supervision over those probation judgments entered in superior court.
This section became effective July 20, 2010. (KM)
Amend Concealed Handgun Permit Laws
S.L. 2010-104 (HB 859) exempts certain retired probation or parole certified officers from the firearm safety and training course requirement for purposes of the concealed handgun permit. To qualify for the exemption the person must apply for the permit within two years following the date of retirement, and must meet all of the following criteria:
 Immediately prior to retirement, the person met applicable firearms training standards and was authorized to carry a handgun in the course of duty.
 The person retired in good standing and was never the subject of a disciplinary action that would have prevented the person from carrying a handgun. Chapter 7 Courts, Justice, and Corrections
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 The person has a vested right to benefits under the Teachers' and State Employees' Retirement System of North Carolina.
 The person is not prohibited by State or federal law from receiving a firearm.
This act becomes effective December 1, 2010, and applies to probation and parole certified officers who retired before, on or after that date. (BC)
Determining Senior Resident Superior Court Judge
S.L. 2010-105 (HB 1398) authorizes the Chief Justice of the Supreme Court to designate the senior resident superior court judge for a district or set of districts if there are two or more regular resident superior court judges in that district or set of districts. The Chief Justice is to consider the seniority, experience, and management competence of the judges when making the selection. Under existing law, if there are two or more regular resident superior court judges in a district or set of districts, the judge with the most continuous service as a regular resident superior court judge serves as the senior resident superior court judge, and if two judges are of equal seniority, the oldest of the judges serves as the senior regular resident superior court judge.
This act becomes effective October 1, 2010, and provides that senior resident superior court judges seated on that date in multi-judge districts continue to serve until the judge vacates the seat. (TH)
Domestic Violence Training for Judges
S.L. 2010-106 (HB 1762) requests that the North Carolina Supreme Court adopt rules establishing minimum standards of education and training for district court judges handling civil and criminal domestic violence cases. The act also encourages The University of North Carolina School of Government to provide education and training opportunities for district court judges and magistrates in the handling of civil and criminal domestic violence cases. The act was a recommendation of the Joint Legislative Committee on Domestic Violence.
This act became effective July 20, 2010. (WGR)
Allow Electronic Parole Notification
S.L. 2010-107 (HB 1115) allows for electronic notification, rather than notice by first class mail, to the media whenever the Post Release Supervision and Parole Commission is considering parole for a person serving a life sentence if such notification would be more timely and cost effective. The other entities that must be notified, including victims and law enforcement, will continue to receive notice by first class mail.
This act became effective July 20, 2010. (EC)
Domestic Violence Cases/Review Criminal Record
S.L. 2010-135 (HB 1812) requires that a law enforcement agency or the prosecutor provide a defendant's criminal history record to a judicial official considering pretrial release conditions where the defendant has been charged with an offense under the domestic violence crimes statute, G.S. 15A-534.1. The judicial official shall consider the record in determining conditions of pretrial release, and then return the record to the agency providing it.
This act becomes effective October 1, 2010. (HAP) Chapter 7 Courts, Justice, and Corrections
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Amend Innocence Inquiry Commission
S.L. 2010-171 (SB 144) amends the 2006 law establishing the North Carolina Innocence Inquiry Commission (Commission) as follows:
 Requires the Chief Justice of the Supreme Court to appoint the post-Commission judicial panel within 20 days of the filing of the opinion of the Commission finding sufficient evidence of factual innocence to merit judicial review.
 Provides if there is an allegation of, or evidence of, prosecutorial misconduct in the case, the Chair of the Commission or the district attorney of the district of conviction may request the Director of the Administrative Office of the Courts (Director) to appoint a special prosecutor to represent the State in lieu of the district attorney of the district of conviction or the district attorney's designee. Upon receipt of a request to appoint a special prosecutor, the Director may temporarily assign a district attorney, assistant district attorney, or other qualified attorney, including one from the prosecutorial district where the convicted person was tried, to represent the State at the hearing before post-Commission judicial panel. The Director may not appoint as special prosecutor any attorney who prosecuted or assisted with the prosecution in the trial of the convicted person.
 Provides the State will have 90 days from the date of the order of the senior resident superior court judge setting the case for hearing to file a response to the Commission's opinion. The response may include joining the defense in a motion to dismiss the charges with prejudice on the basis of innocence.
 Provides the defense and prosecution may compel the testimony of any witness and that all evidence relevant to the case, even if considered by a jury or judge in a prior proceeding, may be presented during the hearing.
 Provides that a person who is determined by the post-Commission judicial panel to be innocent of all charges and against whom all charges are dismissed is eligible for compensation without obtaining a pardon from the Governor. A claim against the State for compensation for loss sustained through erroneous conviction and imprisonment must be made within five years of the date of dismissal of the charges.
 Removes the limitation contained in the 2006 law establishing the Commission that provided that the law applied only to claims of factual innocence filed on or before December 31, 2010.
The provisions of this act related to the hearing process of the post-Commission judicial panel become effective October 1, 2010, and apply to claims of factual innocence filed on or after that date. The remainder of the act became effective August 2, 2010. (JH)
Clarify Expunctions
S.L. 2010-174, Secs. 1-15 (HB 726, Secs. 1-15) make a variety of changes, mostly technical and conforming, to the statutes related to expunction of criminal records. During the 2009 Session, the General Assembly adopted S.L. 2009-510 (SB262) and S.L. 2009-577 (HB1329), which dealt with expunction issues. Both of the two bills were ratified on August 11, 2009, but were not reconciled with each other, resulting in some inconsistencies in various expunction statutes. Additionally, there was an error in the version of S.L. 2009-510 that was adopted on the House floor, resulting in several corrections to the bill not being adopted.
 Corrections due to incorrect version of S.L. 2009-510 adopted by House. –These sections add additional language relating to expunction of records by private entities. This is language that was omitted by the adoption of the incorrect version of the bill in 2009.
 Remove affidavit requirement/Add criminal background check. – These sections delete the requirement to provide affidavits from the clerk of superior court, Chapter 7 Courts, Justice, and Corrections
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chief of police, and sheriff attesting that the applicant for an expunction has no disqualifying convictions. These sections instead require a name-based State and national background check and a search of Administrative Office of the Courts confidential expunction files.
 Other technical and clarifying changes. – These sections amend a new expunction provision authorized by S.L. 2009-577, allowing the expunction of misdemeanor larceny convictions. These sections correct an inconsistency in the law by requiring a 15-year period before the expunction petition may be filed. Additionally, the Division of Motor Vehicles is not required to expunge records that are prohibited from being expunged by federal law requirements for motor vehicle records.
 Technical and clarifying changes to reconcile S.L. 2009-510 (SB 262) and S.L. 2009-577 (HB1329). – These sections make additional technical and clarifying changes necessary to reconcile the two expunction bills that passed in 2009.
The provisions relating to expunction of information by private entities and the Division of Motor vehicles become effective October 1, 2010. The remainder of the sections become effective October 1, 2010, and apply to petitions for expunction filed on or after that date. (SS)
Require Certain Sex Offenders to Register
S.L. 2010-174, Sec. 16 (HB 726, Sec. 16). See Criminal Law and Procedure.
Courts-Martial Amendments
S.L. 2010-193 (HB 1412). See Military, Veterans, and Indian Affairs.
Referrals to Existing Commissions/Committees
Unsecured Bonds
S.L. 2010-152, Secs. 10.1 and 10.2 (SB 900, Secs. 10.1 and 10.2) authorize the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee to study the topics listed below, and report findings with any recommended legislation, to the 2011 Regular Session of the General Assembly:
 Factors used in determining the release of defendants with unsecured bonds.
 Frequency of using unsecured bonds.
 Failure to appear rates under unsecured bonds.
 Amount of time and entity most likely to apprehend a defendant after bond forfeiture.
 Likelihood of converting forfeiture or judgment to revenue.
These sections became effective July 22, 2010. (HAP)
Extend Joint Select Committee on Preservation of Biological Evidence
S.L. 2010-152, Sec. 24 (SB 900, Sec. 24) amends the Session Law creating the Joint Select Committee on Preservation of Biological Evidence to extend the Committee until the convening date of the Regular Session of the 2011 General Assembly, or the filing of the Committee report, whichever occurs first. The Committee's charge includes a review of matters related to the preservation of DNA and biological evidence, including: Chapter 7 Courts, Justice, and Corrections
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 Costs associated with the promulgation of minimum guidelines for the retention and preservation of biological evidence.
 Emerging technologies with regard to the retention and preservation of biological evidence.
 Procedures for the interagency transfer of biological evidence.
This section became effective July 22, 2010. (HAP) Chapter 7 Courts, Justice, and Corrections
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Chapter 8 Criminal Law and Procedure
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Chapter 8
Criminal Law and Procedure
Brenda Carter (BC), Drupti Chauhan (DC), Kara McCraw (KM), Jennifer McGinnis (JLM),
Howard Alan Pell (HAP), Kelly Quick (KQ), Steve Rose (SR), Susan Sitze (SS)
Enacted Legislation
Susie's Law
S.L. 2010-16 (SB 254) increases the penalties for certain types of animal abuse.
The act increases the penalty for maliciously killing an animal by intentional deprivation of necessary sustenance from a Class A1 misdemeanor to a class H felony. Additionally, the penalty for maliciously torturing, mutilating, maiming, cruelly beating, disfiguring, poisoning, or killing an animal is increased from a Class I felony to a Class H felony.
This act becomes effective December 1, 2010, and applies to offenses committed on or after that date. (SS)
Collect DNA Sample on Arrest
S.L. 2010-94 (HB 1403) enacts "The DNA Database Act of 2010." The act requires that a DNA sample be taken from any person arrested for an offense listed in the act, and amends the statutes that provide for a DNA sample upon conviction of all felonies. Currently, 23 states and the federal government have DNA upon arrest statutes.
The DNA samples taken upon arrest will be analyzed, and a record which can identify only the individual who provided the sample will be stored in the State's DNA Database. A search of all state databases against unknown DNA samples connected to crime scenes is conducted weekly by using the Combined DNA Index System (CODIS), administered and operated by the Federal Bureau of Investigation.
 Collection. – An arresting officer either takes, or arranges for another to take, a DNA sample from the person upon arrest, or when the person is fingerprinted at booking.
 The sample is taken by cheek swab, unless a court authorizes that a blood sample be taken.
 If the arrest was made without a warrant, the DNA sample may not be taken until a magistrate has found probable cause that a crime was committed, and that the arrested person committed it.
 The offenses calling for a DNA sample include murder, manslaughter, rape or sex offenses, felony assaults with a deadly weapon or causing serious bodily injury, kidnapping or human trafficking, burglary offenses, arson, armed robbery, stalking, cyberstalking, and any offense which would require the person to register as a sex offender. The act applies to anyone arrested for attempting, soliciting, conspiring, or aiding and abetting another to commit a listed offense.
 If a juvenile is charged for an offense covered under the DNA upon arrest statute, then a DNA sample is obtained when the matter is transferred to superior court.
 It is a condition of pretrial release that a defendant provide fingerprints and, if the offense is listed in the act, a DNA sample.
 Expunction. – Records and samples relating to a defendant’s DNA sample must be expunged by the prosecuting district attorney if (1) the charge is dismissed, (2) the defendant is acquitted of the charge, (3) the charge is not filed within a designated Chapter 8 Criminal Law and Procedure
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time period, or (4) the defendant is guilty of a lesser-included misdemeanor that is not on the list of offenses contained in the act.
 If the charge is dismissed, there is an acquittal, or there is a conviction of a non-listed lesser-included misdemeanor, the prosecuting district attorney must initiate the process by: Verifying that a qualifying circumstance exists; signing a verification form if the State dismissed the charge, or obtaining a judge's signature on the form if the court dismissed the charge or there was an acquittal; and then forwarding the form to the State Bureau of Investigation (SBI). The State has 30 days to complete the verification form and send it to the SBI.
 If the DNA record and sample is not required to be kept under some other provision of law, the SBI expunges the record and sample from the State DNA Database and Databank. The expunction is to take place within 30 days of the SBI's receipt of the verification form, and a letter confirming the expunction is sent to the defendant. If the defendant's sample is not eligible for expunction, then a letter so indicating is sent to the defendant.
 Until June 1, 2012, if the charge is not filed within a designated time period (as opposed to the other qualifying circumstances), then the defendant must initiate the process by providing the district attorney with a request form for the expunction. On or after June 1, 2012, the request form requirement expires, and the State is responsible in all circumstances with initiating the process.
 The defendant may seek judicial review based on (i) the State's determination that the defendant is not eligible for expunction, or (ii) inaction on the request by the prosecuting attorney or the SBI within the prescribed time periods.
 If the DNA record and sample is not expunged within the prescribed time, then a database match of the defendant's DNA sample with an unknown sample, occurring after the expiration of the statutory period for expunction, is invalid and not admissible as evidence in a criminal proceeding against the defendant.
 A defendant's DNA sample contained in the DNA databank, which would otherwise be expunged, is exempt from expunction if it is part of an object which contains evidence relating to another person. The DNA record in the database would be expunged.
 Amendments. – The act makes several changes to existing laws:
 Amends definitions, including "DNA Sample" (to specifically include "cheek swabs"); "State DNA Database" (describes the various types of DNA records); and provides new definitions for "arrestee," "criminal justice agency," and "conviction."
 States the types of records that the Database shall store and maintain, including: Crime scene evidence; arrestees, offenders, and persons found not guilty by reason of insanity, who are required to submit samples; persons required to register as sex offenders; missing persons; unidentified persons or body parts; relatives of missing persons; and anonymous DNA profiles for forensic validation.
 Deletes the term ―blood‖ to conform to the language in the section on testing to reflect the additional methods of DNA sampling provided in the Article.
 Clarifies that a defendant who is convicted but not sentenced to confinement, and who provides a sample that cannot be loaded into the State DNA database for any reason, is under a continuing order to provide a DNA sample.
 Increases the penalty for willfully disclosing identifiable information in the Database to an unauthorized person from a Class 1 misdemeanor to a Class H felony, as well as increasing the penalty in the same manner for a person who unlawfully obtains that information.
 Amends the statute relating to confidentiality of records to clarify that DNA records and samples are not public records; that the SBI is not required to Chapter 8 Criminal Law and Procedure
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provide the State DNA Database as a discovery matter; that individual records and samples are discoverable under the rules of criminal procedure; and specifies the authorized purposes for which DNA records and samples may be released, including: Law enforcement identification purposes; criminal defense and appeal purposes; forensic validation studies; and establishment or maintenance of a population statistics database.
 Reporting. – The act contains several report and recommendation requirements.
 The SBI is directed to report annually to the Joint Legislative Commission on Governmental Operations and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee. The report is to include a calendar year summary of the operations and expenditures associated with the DNA Database and Databank and specific data on the number of arrestee samples, matches, expunctions, and processing times.
 The Department of Justice, in consultation with the Administrative Office of the Courts and the Conference of District Attorneys, is directed to study, develop, and recommend an automated procedure to facilitate the expunction process. The report must be made to the Joint Legislative Commission on Governmental Operations and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee, on or before the effective date of the act.
This act becomes effective February 1, 2011. (HAP)
Ban Electronic Sweepstakes
S.L. 2010-103 (HB 80) prohibits the use of electronic machines or devices for conducting or promoting sweepstakes. The act makes it unlawful for any person to operate, or place into operation, an electronic machine or device to conduct a sweepstakes through the use of an entertaining display, or to promote a sweepstakes that is conducted through the use of an entertaining display. It is the intent of the act to prohibit any mechanism that seeks to avoid application of the act through the use of subterfuge or pretense. The act provides a Class 1 misdemeanor for a first offense, a Class H felony for a second offense, and a Class G felony for a third or subsequent offense. Each violation of the act is a separate offense. The act does not make unlawful any activity lawfully conducted on Indian lands pursuant to a Tribal-State Gaming Compact.
Provisions are made for the seizure and disposition of any electronic machines and devices prohibited in the act, and several technical changes are made to existing gaming definitions to clarify that additional forms of payment, such as debit cards and prepaid cards, are included in the definition.
This act becomes effective December 1, 2010, and applies to offenses committed on or after that date. (SS)
Amend Felony Firearm Act/Clarify Britt Case
S.L. 2010-108 (HB 1260) amends the State Felony Firearms Act to create a process for persons who have been convicted of certain felonies to petition the court for restoration of firearms rights.
 The act establishes specific criteria that must be met in order to qualify for the restoration of firearms rights including the following: The person may have been convicted of one nonviolent felony only. A nonviolent felony does not include Class A, B1, or B2 felonies, and also does not include any Class C through I felony if the offense includes an assault, the person possessed or used a firearm in the commission of the offense, or the offense is one that requires the person to register as a sex offender. Chapter 8 Criminal Law and Procedure
Page 40
 The person's citizenship rights must have been restored for at least 20 years prior to the petition.
 The person must not have been convicted of any violent misdemeanor since the felony conviction.
 The person must be a resident of North Carolina for at least one year prior to the petition.
 The person must submit fingerprints for a criminal background check.
 The court must deny the petition of any person who:
 Is ineligible to possess firearms under a provision of law other than G.S. 14-415.1.
 Is under indictment for a felony.
 Is a fugitive from justice.
 Is an unlawful user of drugs or alcohol.
 Is or has been dishonorably discharged from the military.
 Has been convicted or received a Prayer for Judgment Continued (PJC) for a violent misdemeanor.
 Has received a PJC for another felony.
 Is awaiting trial, appeal, or sentencing for a disqualifying crime.
 Is currently subject to a domestic violence protective order or a civil no contact order.
The burden is on the petitioner to establish by a preponderance of the evidence that they
are entitled to the restoration. If a petition is denied, the person may petition again after one year from the date of denial, or if the denial was based solely on the existence of a domestic violence protective order or civil no contact order, the person may petition again upon expiration of the order. If a petition is granted, the clerk of court must forward certified copies to the sheriff of the county in which the petitioner resides, the Department of Justice, and the national instant background check system index.
There is a $200 fee for filing the petition, unless the petitioner is indigent. Conviction of a subsequent felony after restoration of firearms rights results in an automatic revocation of the firearms rights restoration, and makes the person ineligible to have those rights again restored. The act provides a Class 1 misdemeanor for submitting false information in a petition, and conviction of this offense results in disqualification from further petitioning for the restoration of firearms rights.
Additionally, the act provides that the State Felony Firearms Act does not apply, and there is no disentitlement if a person is convicted of a felony pertaining to antitrust violations, unfair trade practices, or restraints of trade.
The act requires the Attorney General to submit a copy of the act to the U.S. Attorney General, the United States Department of Justice, and the federal Bureau of Alcohol, Tobacco, and Firearms for review to determine if a person can legally purchase and possess a firearm under federal law if this act would allow it under State law. The Attorney General shall report the response to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee.
The provision of this act requiring the Attorney General to submit this act to other agencies became effective July 20, 2010. The remainder of this act becomes effective February 1, 2011, and applies to offenses committed on or after that date. Prosecutions for offenses committed before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions. (SS)
Require Certain Sex Offenders to Register
S.L. 2010-174, Sec. 16 (HB 726, Sec. 16) amends the effective date of a previous law, to require additional sex offenders convicted in another state to register in this State. Chapter 8 Criminal Law and Procedure
Page 41
In 2006, the General Assembly amended the sex offender registration statutes to require any person who has a "final conviction in another state of an offense that requires registration under the sex offender registration statutes of that state" to register in North Carolina as a sex offender. The effective date for this requirement was for all offenses committed on or after December 1, 2006, and to all individuals who move into this State on or after December 1, 2006.
This section changes the effective date for the registration requirement to include all offenses committed prior to, on, or after December 1, 2006, and all individuals who move into this State prior to, on, or after December 1, 2006. However, the applicability of the new effective date is limited to anyone who on or after October 1, 2010, is currently registered as a sex offender, is serving an active sentence, is on supervised probation, parole or post-release supervision, or is convicted of a felony.
This section becomes effective October 1, 2010. (SS) Chapter 8 Criminal Law and Procedure
Page 42
Chapter 9 Education
Page 43
Chapter 9
Education
Dee Atkinson (DA), Drupti Chauhan (DC), Sara Kamprath (SK), Kara McCraw (KM)
Enacted Legislation
Public Schools
Reform Low-Performing Schools
S.L. 2010-1 (SB 704) authorizes the State Board of Education (SBE) to approve a local board of education's (local board) request to reform any school in its local school administrative unit (LEA) identified by the SBE as a continually low-performing school. The SBE is given authority to authorize local boards to adopt one of four reform models:
 Transformation model. – Requires the following areas be addressed in transforming the school:
 Developing and increasing teacher and school leadership effectiveness.
 Comprehensive instructional reform strategies.
 Increasing learning time and creating community-oriented schools.
 Providing operational flexibility and sustained support.
 Restart model. – Authorizes the local board to operate the school in one of the following ways:
 With the same exemptions from statutes and rules as a charter school.
 Under the management of an educational management organization selected through a rigorous review process.
Schools operating under this model remain under the control of the local board, and employees assigned to the school remain employees of the LEA with the protections provided by statute for employment of public school teachers. The act clarifies that it should not be interpreted to increase the maximum number of charter schools authorized by statute and that no school authorized under the restart model will count against the authorized nu

SUMMARIES OF SUBSTANTIVE RATIFIED LEGISLATION - 2010
SUMMARIES OF SUBSTANTIVE
RATIFIED LEGISLATION
2009 GENERAL ASSEMBLY
2010 REGULAR SESSION
RESEARCH DIVISION
N.C. GENERAL ASSEMBLY
SEPTEMBER 2010
350 copies of this document were published at an estimated cost of or about $5.25 per copy. September 2010
To the Members of the 2010 Session of the 2009 General Assembly:
This publication contains summaries of all substantive legislation of general applicability and certain local legislation having general import from the 2010 Regular Session. Most local acts are not analyzed in this publication. Significant appropriations matters related to the subject area specified also are included. For an in-depth review of the appropriations and revenue process, please refer to Overview: Fiscal and Budgetary Actions, prepared by the Fiscal Research Division.
The document is organized alphabetically by subject areas. Where feasible, the subject area is further divided into subgroups. Each subject area also includes a listing of legislative, independent, and agency studies. A bill/session law index listing the page number of each summary is at the end of the publication.
This document is the result of a combined effort by the following staff members of the Research Division: Denise Huntley Adams, Dee Atkinson, Cindy Avrette, Susan Barham, Drupti Chauhan, Erika Churchill, Karen Cochrane-Brown, Judy Collier, Tim Dodge, Bill Gilkeson, Kory Goldsmith, Trina Griffin, Tim Hovis, Jeff Hudson, Sara Kamprath, Brad Krehely, Mariah Matheson, Theresa Matula, Kara McCraw, Jennifer McGinnis, Joe Moore, Jennifer Mundt, Shawn Parker, William Patterson, Howard Alan Pell, Giles S. Perry, Ben Popkin, Kelly Quick, Wendy Graf Ray, Barbara Riley, Steve Rose, and Susan Sitze. Heather Fennell is chief editor of this year’s publication, and Brenda Carter is co-editor. Dan Ettefagh, of the Bill Drafting Division, and Martha Walston, of the Fiscal Research Division, also contributed to this document. Lucy Anders, of the Research Division, also helped edit this document. The specific staff members contributing to each subject area are listed directly below the chapter heading for that area. Staff members' initials appear after their names and after each summary they contributed. If you would like further information regarding any legislation in the various summaries, please contact the Research Division Office at (919) 733-2578.
This document also is available on the Internet. Go to the General Assembly’s homepage at http://www.ncleg.net. Click on "Legislative Publications," then "Research Division," then "Summaries of Substantive Ratified Legislation." Each summary is hyperlinked to the final bill text, the bill history, and any applicable fiscal note.
I hope that this document will provide a useful source of information for the members of the General Assembly and the public in North Carolina. We would appreciate receiving any suggestions for this publication's improvement.
Yours truly,
O. Walker Reagan
Director of Research Guide to Staff Initials
(BC) Brenda Carter
(BG) Bill Gilkeson
(BK) Brad Krehely
(BP) Ben Popkin
(BR) Barbara Riley
(CA) Cindy Avrette
(DA) Dee Atkinson
(DC) Drupti Chauhan
(DE) Dan Ettefagh
(DHA) Denise Huntley Adams
(EC) Erika Churchill
(GSP) Giles S. Perry
(HF) Heather Fennell
(HAP) Howard Alan Pell
(JC) Judy Collier
(JH) Jeff Hudson
(JLM) Jennifer McGinnis
(JHM) Joe Moore
(JM) Jennifer Mundt
(KCB) Karen Cochrane-Brown
(KG) Kory Goldsmith
(KM) Kara McCraw
(KQ) Kelly Quick
(MM) Mariah Matheson
(MW) Martha Walston
(SB) Susan Barham
(SK) Sara Kamprath
(SP) Shawn Parker
(SR) Steve Rose
(SS) Susan Sitze
(TD) Tim Dodge
(TG) Trina Griffin
(TH) Tim Hovis
(TM) Theresa Matula
(WGR) Wendy Graf Ray
(WP) William Patterson i
TABLE OF CONTENTS
CHAPTER 1: AGRICULTURE AND WILDLIFE...................................................... 1
ENACTED LEGISLATION ................................................................................................ 1
STUDIES ........................................................................................................................ 3
CHAPTER 2: ALCOHOLIC BEVERAGE CONTROL ............................................. 5
ENACTED LEGISLATION ................................................................................................ 5
CHAPTER 3: CHILDREN AND FAMILIES ............................................................. 11
ENACTED LEGISLATION .............................................................................................. 11
STUDIES ...................................................................................................................... 13
CHAPTER 4: CIVIL LAW AND PROCEDURE....................................................... 15
ENACTED LEGISLATION .............................................................................................. 15
STUDIES ...................................................................................................................... 15
CHAPTER 5: COMMERCIAL LAW AND CONSUMER PROTECTION ........... 17
ENACTED LEGISLATION .............................................................................................. 17
STUDIES ...................................................................................................................... 20
Legislative Research Commission (LRC) ............................................................... 20
New/Independent Studies/Commissions.................................................................. 21
CHAPTER 6: CONSTITUTION AND ELECTIONS................................................ 23
ENACTED LEGISLATION .............................................................................................. 23
CHAPTER 7: COURTS, JUSTICE, AND CORRECTIONS .................................... 31
ENACTED LEGISLATION .............................................................................................. 31
Referrals to Existing Commissions/Committees ..................................................... 34
CHAPTER 8: CRIMINAL LAW AND PROCEDURE ............................................. 37
ENACTED LEGISLATION .............................................................................................. 37
CHAPTER 9: EDUCATION ........................................................................................ 43
ENACTED LEGISLATION .............................................................................................. 43
Public Schools ......................................................................................................... 43
Higher Education .................................................................................................... 56
Community Colleges ............................................................................................... 57
Universities ............................................................................................................. 60
STUDIES ...................................................................................................................... 64
Legislative Research Commission (LRC) ............................................................... 64
New/Independent Studies/Commissions.................................................................. 64
Referrals to Existing Commissions/Committees ..................................................... 65
Referrals to Departments, Agencies, Etc. ............................................................... 65 ii
CHAPTER 10: ENVIRONMENT AND NATURAL RESOURCES ........................ 69
ENACTED LEGISLATION .............................................................................................. 69
Environmental Health ............................................................................................. 69
Fisheries .................................................................................................................. 69
Miscellaneous ......................................................................................................... 70
Solid/Hazardous Waste ........................................................................................... 74
Water Quality/Quantity/Groundwater .................................................................... 77
Zoning and Development ........................................................................................ 81
STUDIES ...................................................................................................................... 82
New/Independent Studies/Commissions.................................................................. 82
Referrals to Existing Commissions/Committees ..................................................... 83
Referrals to Departments, Agencies, Etc. ............................................................... 86
CHAPTER 11: FINANCE ............................................................................................ 89
ENACTED LEGISLATION .............................................................................................. 89
STUDIES ...................................................................................................................... 95
Referrals to Existing Commissions/Committees ..................................................... 95
CHAPTER 12: HEALTH AND HUMAN SERVICES .............................................. 97
ENACTED LEGISLATION .............................................................................................. 97
STUDIES .................................................................................................................... 108
Legislative Research Commission (LRC) ............................................................. 108
Referrals to Departments, Agencies, Etc. ............................................................. 109
New/Independent Studies/Commissions................................................................ 113
CHAPTER 13: INSURANCE ..................................................................................... 115
ENACTED LEGISLATION ............................................................................................ 115
Appropriations Act of 2010 ................................................................................... 115
State Health Plan .................................................................................................. 115
Miscellaneous ....................................................................................................... 116
STUDIES .................................................................................................................... 119
Legislative Research Commission (LRC) ............................................................. 119
CHAPTER 14: LOCAL GOVERNMENT ................................................................ 121
ENACTED LEGISLATION ............................................................................................ 121
CHAPTER 15: MILITARY, VETERANS', AND INDIAN AFFAIRS .................. 123
ENACTED LEGISLATION ............................................................................................ 123
Legislative Research Commission (LRC) ............................................................. 125
CHAPTER 16: OCCUPATIONAL BOARDS AND LICENSING ......................... 127
ENACTED LEGISLATION ............................................................................................ 127
STUDIES .................................................................................................................... 129
Legislative Research Commission (LRC) ............................................................. 129
Referrals to Departments, Agencies, Etc. ............................................................. 129 iii
CHAPTER 17: PROPERTY, TRUSTS, AND ESTATES ....................................... 131
ENACTED LEGISLATION ............................................................................................ 131
CHAPTER 18: RESOLUTIONS ................................................................................ 133
JOINT RESOLUTIONS .................................................................................................. 133
CHAPTER 19: RETIREMENT ................................................................................. 137
ENACTED LEGISLATION ............................................................................................ 137
CHAPTER 20: STATE GOVERNMENT ................................................................. 139
ENACTED LEGISLATION ............................................................................................ 139
STUDIES .................................................................................................................... 141
CHAPTER 21: TRANSPORTATION ....................................................................... 145
ENACTED LEGISLATION ............................................................................................ 145
STUDIES .................................................................................................................... 151
New/Independent Studies/Commissions................................................................ 151
Referrals to Existing Commissions/Committees ................................................... 151
Referrals to Departments, Agencies, Etc. ............................................................. 152
CHAPTER 22: UTILITIES ........................................................................................ 155
ENACTED LEGISLATION ............................................................................................ 155
STUDIES .................................................................................................................... 156
INDEX ............................................................................................................................ 157
iv
Chapter 1 Agriculture and Wildlife
Page 1
Chapter 1
Agriculture and Wildlife
Mariah Matheson (MM), Howard Alan Pell (HAP), Barbara Riley (BR), Steve Rose (SR)
Enacted Legislation
Improve Success of Fishery Management Plans
S.L. 2010-13 (HB 1713). See Environment and Natural Resources.
Fishery Management Plan Supplements
S.L. 2010-15 (HB 1710). See Environment and Natural Resources.
Winston-Salem/Ashe Fox Trapping/Greene Hunting
S.L. 2010-82 (HB 1893) amends the fox trapping laws for Winston-Salem and Ashe County, and repeals certain hunting laws in Greene County.
Winston-Salem
The act provides an open season for the taking of foxes by trapping with cages in the city of Winston-Salem. Trapping with cages will be allowed only during the trapping season set by the Wildlife Resource Commission each year. There are no tagging requirements before or after the sale of foxes taken and no season bag limits.
Ashe County
The act makes three changes to fox hunting in Ashe County:
 Extends the fox trapping season to November 1 through November 28.
 Removes specific requirements on leghold traps.
 Removes the previously set expiration date of September 30, 2010.
Greene County
The act repeals two older session laws concerning hunting in Greene County:
 Repeals Section 3 of S.L. 1975-219, which prohibited hunting foxes with firearms during the two week deer season, as the two week deer season no longer exists.
 Repeals Section 1 of S.L. 1987-132 and removes Greene County from S.L. 1985-471, which prohibits the use of firearms from or on a public road or right-of-way. Hunting from or on a public road or right-of-way in Greene County remains prohibited by S.L. 2006-12.
The act became effective July 9, 2010. (MM)
Animal Euthanasia Technicians
S.L. 2010-127 (HB 1741) was a recommendation of the General Statutes Commission. The act allows animal shelters owned, operated, or maintained by a unit of local government or under contract with a unit of local government to register with the North Carolina Department of Health and Human Services (DHHS) in order to obtain euthanasia drugs directly from the manufacturer. Shelters registering with DHHS also will be required to register with the federal Drug Enforcement Agency. The persons who may order euthanasia drugs for a shelter are limited to the shelter manager, chief operating officer, or a licensed veterinarian. Any properly certified animal euthanasia technicians may administer the drugs to dogs and cats lawfully held by the shelter, but only on the premises of the shelter. Chapter 1 Agriculture and Wildlife
Page 2
The act clarifies the Board of Agriculture's authority to adopt rules for the certification of a euthanasia technicians. Grounds for disciplinary actions include violation of the Animal Welfare Act or the Board’s rules, conviction of any felony or lesser offense involving animal cruelty or related to being a euthanasia technician, falsifying an application, or otherwise becoming ineligible for certification. The Department of Agriculture and Consumer Services (DACS) is authorized to deny, revoke, or suspend a euthanasia technician’s certification for conviction of a drug-related felony even if the Board has not included that ground in its rules. The act also requires applicants for certification as a euthanasia technician to provide the DACS with fingerprints and consent for the DACS to obtain a criminal record check from the Department of Justice. Refusal is grounds to deny the application. The Department of Justice is authorized to provide criminal record checks to DACS for applicants for certification as a euthanasia technician and to impose the requisite fee.
This act becomes effective October 1, 2010. (BR)
Suspension and Revocation of Fishing Licenses
S.L. 2010-145 (HB 1714). See Environment and Natural Resources.
Conserve and Protect Agricultural Water Resources
S.L. 2010-149 (HB 1748). See Environment and Natural Resources.
Spay and Neuter Account
S.L. 2010-152, Sec. 11.4 (SB 897, Sec. 11.4) transfers the Spay/Neuter Program and the Spay/Neuter Account from the Department of Health and Human Services to the Department of Agriculture and Consumer Services (Department). The section also:
 Eliminates the requirement that 20¢ of the rabies tag fee go to the Spay/Neuter Account.
 Increases the cost of the Animal Lovers special license plate by $10.
 Eliminates a provision that stated that if the total amount generated by the rabies tag fee allocation for rabies education and prevention (5¢ per tag) was less than $47,500, then the difference between the amount generated and $47,500 could be used from the Spay/Neuter Account for rabies education and prevention purposes.
 Changes a requirement that 20% of the Account shall be used to develop the statewide education program component of the Spay/Neuter Program. The amendment provides that the Department "may" use "up to" 20% for that purpose.
This section became effective July 1, 2010. (HAP)
Coyote Controls
S.L. 2010-156 (HB 1824) authorizes a person who has been issued a depredation permit for coyotes to use a Collarum™ trap, or similar trap approved by the Wildlife Resources Commission (WRC), solely for the purpose of taking coyotes under that permit. The person authorized to use these traps under the depredation permit is required to provide to the Commission information related to the effectiveness and efficiency of the trap. To minimize the risk of harm to non-targeted species, any trap set must be attended daily and any non-target animal captured must be released.
The provisions regarding use of the traps becomes effective October 1, 2010. Livestock and poultry owners will be issued a depredation permit for coyotes upon request, and the WRC is directed to adopt rules to implement the provision on or before that date.
The remainder of this act became effective on July 22, 2010. (MM) Chapter 1 Agriculture and Wildlife
Page 3
Studies
Fur-Bearer and Fox Management
S.L. 2010-152, Sec. 2.9 (SB 900, Sec. 2.9) authorizes the Legislative Research Commission to study the effectiveness of the North Carolina Wildlife Resources Commission's implementation of laws relating to its capability for studying fox and fur-bearer population, implementation of management methods, and imposition of controls designed to produce optimum fox and fur-bearer populations in the various areas of the State.
This section became effective July 22, 2010. (HAP)
Ownerless Dogs and Cats/Commercial Dog Breeding
S.L. 2010-152, Sec. 2.12 (SB 900, Sec. 2.12) authorizes the Legislative Research Commission to study issues related to ownerless dogs and cats, and the State's role in ensuring the humane treatment of dogs and cats by breeders, shelters, and other facilities that house dogs and cats.
This section became effective July 22, 2010. (SR)
Insurance Coverage for Fresh Produce Growers
S.L. 2010-152, Sec. 2.15 (SB 900, Sec. 2.15) authorizes the Legislative Research Commission to study the issue of adequate insurance coverage options for fresh produce growers.
This section became effective July 22, 2010. (BR)
Study Impact of Exempting Wildlife Resources Commission and Marine Fisheries Commission from the Legislative Disapproval Process
S.L. 2010-152, Sec. 11.1 (SB 900, Sec. 11.1) authorizes the Joint Legislative Administrative Procedure Oversight Committee to study the impact of exempting the Wildlife Resources Commission and the Marine Fisheries Commission from the legislative disapproval process under the Administrative Procedure Act. In conducting the study, the Committee may consider the number of bills introduced since 2003 to disapprove rules adopted by either of the two Commissions, the effect of the delayed effective dates on the enforcement capabilities of the two Commissions, and alternatives available to the public for objecting to rules adopted by either of the two Commissions. The Joint Legislative Administrative Procedure Oversight Committee may report its findings and recommendations to the 2011 General Assembly.
This section became effective July 22, 2010. (SR)
Extend the North Carolina Zoological Park Funding and Organization Study Committee
S.L. 2010-152, Part XXI (SB 900, Part XXI). See Environment and Natural Resources. Chapter 2 Agriculture and Wildlife
Page 4
Chapter 2 Alcoholic Beverage Control
Page 5
Chapter 2
Alcoholic Beverage Control
Brenda Carter (BC), Kelly Quick (KQ), Susan Sitze (SS)
Enacted Legislation
Modernization of the State ABC System
S.L. 2010-122 (HB 1717) makes a number of changes to the State's ABC laws, many of which were recommended by a Joint Legislative Study Committee on Alcoholic Beverage Control issues.
Ethics. – The act makes it unlawful for contractors or suppliers who have or seek to have a contract with the ABC Commission (Commission) or local ABC board to make gifts or to give favors to any Commission or local board officers or employees and also unlawful for an officer or employee to accept such gifts. The act makes the Commission subject to the State Ethics Act, which prohibits the use of public position for private gain, prohibits certain gifts and other compensation, prohibits the use of information for private gain, and sets other rules of conduct for public servants. The act provides specific guidelines pertaining to conflicts of interest for local ABC boards – prohibiting a local board member from knowingly using his or her position in a manner that would result in financial benefit to the local board member, to his or her spouse or near relative, or to any business with which the local board member is associated. The act prohibits a local board member from improperly using or disclosing any confidential information, and imposes an affirmative duty on every local board member to promptly disclose in writing to the local board any actual or potential conflict of interest.
Each local ABC board must adopt a policy containing a code of ethics consistent with statutory provisions concerning conflicts of interests and gifts. Each local board member must receive a minimum of 2 hours of ethics education within 12 months after initial appointment to the board, and again within 12 months after each subsequent appointment to the office. The education may be provided by the Commission or by some other qualified source approved by the Commission. A local board may require appropriate ethics training and education for its employees. The Commission is required to develop a model ethics polity that local ABC boards may adopt in compliance with the requirements of this act.
Performance Standards. – The act requires the Commission to establish performance standards, and to ensure that all local boards comply with those standards by conducting regular or special audits, performance evaluations, monitoring ABC law enforcement efforts, or taking other measures including inspections by Commission auditors or alcohol law enforcement agents. When a local board fails to meet established performance standards, the Commission must meet with the chair of the local board and the appointing authority and issue a statement of findings. The appointing authority will, in consultation with the Commission, develop and deliver a performance improvement plan to the local board. The plan will include recommendations for improved performance, and state a period of time in which improvements are to occur and what actions will be taken by the Commission if performance standards are not met within the prescribed time limits. The appointing authority may allow no more than 12 months for the local board to implement and show improvement under the plan; however, upon a showing of good cause and in consultation with the Commission, the appointing authority may allow up to an additional six-month period of time. If the Commission determines that the established performance standards cannot be met after a performance improvement plan has been implemented and adequate time has been given, the Commission must take appropriate action to avoid insolvency. The Commission has authority to close the local board or one or more of its stores, or to merge the local board with another local board in order to maintain solvency. The Chapter 2 Alcoholic Beverage Control
Page 6
Commission also has authority to seize the assets of the local board and liquidate assets necessary to satisfy debt and maintain solvency of the local board.
The act gives the Commission authority to adopt rules to establish the performance standards for local boards, including standards that address enforcement of ABC laws, store appearance, operating efficiency, solvency, and customer service. The Commission also has authority to adopt rules setting mandatory training requirements for local board members, finance officers, and general managers, and to provide for the purchase of liquor from another ABC board by mixed beverage permittees when an ABC system becomes insolvent or closes. Local ABC boards must comply with all rules adopted by the Commission pursuant to its authority, and meet all standards set by the Commission for performance and training. Failure to comply with Commission rules will be grounds for removal.
ABC Law Enforcement. – The act limits the number of officers that a contracting law enforcement agency may designate to conduct inspections of ABC-licensed premises. Under existing law, instead of hiring local ABC officers a local board may contract to pay its enforcement funds to a local law enforcement agency for enforcement of the ABC laws within the agency's territorial jurisdiction. Officers of contracting law enforcement agencies have the same authority to inspect that an ABC officer employed by that local board would have, including viewing the entire premises and examining the books and records of the permittee. The act requires that a contracting law enforcement agency designate not more than five officers to conduct ABC inspections. The act preserves pre-existing local acts applicable to Greensboro and Charlotte.
The act requires local board ABC officers and law enforcement agencies subject to enforcement agreements with a local board to provide monthly reports to the local board, including information on the number of arrests made for ABC law and controlled substance violations and other violations at ABC-permitted outlets and other locations, the number of agencies assisted with ABC law or controlled substance related matters, and the number of alcohol education and responsible server programs presented. The local board must submit a copy of the report to its appointing authority and to the Commission, and the Commission will publish the information on a public Internet website. The reporting requirements become effective January 1, 2011.
The act makes a conforming change to the law pertaining to local ABC officers, making it clear that designated officers of agencies that contract with local boards for enforcement of the ABC laws are subject to statutory provisions concerning discharge from those duties.
ABC Elections. – The act increases the threshold for cities to qualify for an ABC store election by requiring that a city have at least 1,000 registered voters. The previous threshold was 500 registered voters.
The act allows any city that has at least 500 registered voters to hold a mixed beverage election. It eliminates a requirement that the city already operate a city ABC store in order to hold the mixed beverage election or if not, the county either operates an ABC store or has already held a mixed beverage election and the vote was against the sale of mixed beverages.
Local ABC Boards. – The act provides that a local ABC board may consist of three or five members and provides for staggered terms.
Mission: The act defines the mission of local ABC boards and their employees: Controlling the sale of spirituous liquor and promoting customer-friendly, modern, and efficient stores.
Compensation: The act limits the compensation of local ABC board members to not more than $150 per meeting, unless a different level of monetary compensation is approved by the board's appointing authority. If a different level of compensation is approved, the appointing authority is required to provide written notice to the Commission.
The act limits the compensation of general managers of local ABC boards. The salary authorized for the board's general manager may not exceed the salary authorized by the General Assembly for the clerk of superior court of the county in which the appointing authority was originally incorporated. A different level of monetary compensation may be approved by the board's appointing authority. If a different level of compensation is approved, the appointing Chapter 2 Alcoholic Beverage Control
Page 7
authority must provide written notice to the Commission. No employee of a local board may receive a salary in excess of the amount authorized for the salary of the general manager. The salary provisions become effective October 1, 2010, and apply to general managers and employees hired on or after that date.
Members and employees of local ABC boards may be reimbursed for travel on official business in accordance with the statutory travel allowances of State officers and employees. With approval of the appointing authority, a local board may adopt a travel policy that conforms to the travel policy of the appointing authority. The local board must annually provide to the Commission a copy of its travel policy along with the appointing authority's written confirmation of approval. Excess expenses not covered by the local board's travel policy may be paid only with written authorization of the appointing authority's finance officer, and the local board must submit a copy of the authorization to the Commission within 30 days of approval.
Bonding: The act increases the minimum amount of the bond required for local ABC board members and for the employees designated as the general manager or finance officer of the local board, raising it from $5,000 to $50,000. No board member will be exempt from the requirement, and the appointing authority may require a higher bond amount for any board member or employee who handles board funds. The act also increases the minimum amount of the bond required for ABC store managers, raising it from $5,000 to $50,000. An appointing authority may require a bond that exceeds the minimum amount.
Nepotism: The act prohibits members of an immediate family or members of the same household from being employed within a local board if the employment will result in one family or household member supervising another, or if one family or household member will occupy a position that has influence over the employment, promotion, or salary administration of another. The provision applies to local board members and employees. The policy becomes effective October 1, 2010, and applies to employees hired on or after that date.
The provisions regarding the appointment and organization of local ABC boards become effective October 1, 2011, and are applicable to all local ABC boards, notwithstanding any local acts that may provide otherwise.
Financial Operations of Local Boards. – The finance officer is the person responsible for keeping the accounts of the local board, including receiving and depositing receipts and disbursing funds. The general manager is the person responsible for the oversight of daily operations of the ABC system. The act requires the local board to designate an employee other than the general manager to be the finance officer of the local board, and sets out the duties and powers of the finance officer. For good cause shown, the Commission may allow the board's general manager also to be the finance officer.
A local board must operate under an annual balanced budget in accordance with provisions in the act. All monies received and expended by a local board must be included in the budget, and no local board may expend any monies except in accordance with the budget. The general manager of the local board, as budget officer, will prepare a budget for consideration by the local board. The proposed budget must be submitted to the local board, its appointing authority, and the Commission by June 1 and a copy made available for public inspection. Before adopting the budget, the board must hold a public hearing. The act establishes specific directions and limitations that a local board must comply with in adopting its budget. Once the budget is adopted, it must be filed with the board's finance officer and budget officer, the board's appointing authority, and the Commission. The act provides for amendments to an adopted budget and for an interim budget in case adoption of the budget is delayed until after the start of the fiscal year. Each local board must establish and maintain an accounting system designed to show in detail its assets, liabilities, revenues, and expenditures. The act contains specific provisions relative to incurring obligations, disbursements, and local board approval of bills, invoices, or claims. All checks or drafts must be signed by the finance officer or a properly designated deputy finance officer, and countersigned by the chair of the local board or the general manager, except where the requirement for dual signatures is waived by the Commission. Audits and reports currently required to be submitted to the Commission also must Chapter 2 Alcoholic Beverage Control
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be submitted to the local board's appointing authority. The act gives the Commission specific authority to inquire into and investigate the internal control procedures of a local board, and to require any modifications necessary or desirable to prevent the embezzlement or mishandling of public monies. The finance officer and sureties on the official bond will be liable for any sums committed or disbursed in violation of the law. The provisions pertaining to financial operations of local boards become effective May 1, 2011, and apply to local board fiscal years beginning July 1, 2011. The provisions apply to all local boards, notwithstanding any local acts.
Removal of Board Members. – The act prohibits the Commission or its individual members from attempting to coerce any appointing authority to appoint a particular person as a member of a local board, or attempting to coerce a local board to employ a particular applicant. It gives the Commission authority to remove any member or employee of a local board for disqualification under the law, violation of the ABC laws, failure to complete required training, or engaging in conduct constituting moral turpitude or which brings the local board of the ABC system into disrepute. The act sets out a removal process that requires written findings of fact upon which the decision for removal is based, and provides for an informal removal hearing before the Commission. The Commission has authority to discharge the board member or employee if two-thirds of the Commission's members vote for removal. The Commission has the sole power, in its discretion, to determine if cause exists for removal of a local board member or employee who has requested a hearing before the Commission, and the Commission's decision is final. The local board member or employee may appeal the Commission's final decision to the Court of Appeals. The standard of review is abuse of discretion, and the sole remedy is reinstatement with back pay. Awards for back pay will be paid by the local board from which the board member or employee was removed. These provisions apply to all local boards.
The act also amends the law concerning judicial authority to remove from office or discharge from employment any Commission or local board member or employee, or any ALE agent who violates the State's alcohol laws or commits any felony. The act makes the discharge provision applicable to local law enforcement officers who serve as the designated officer of an agency which holds a contract to enforce the ABC laws for a local board, giving the judge authority to prohibit the officer from being designated as an officer that enforces the ABC law for a period up to three years.
Wineries. – The act amends the law concerning the obligations of the purchaser of a winery, making it clear that the purchaser as well as any successor to the rights of a winery is obligated to all the terms and conditions of an agreement in effect on the date of the purchase or other acquisition of the right to distribute a brand. This provision became effective September 15, 2010, and applies to all existing franchise agreements. A supplier's shipment of wine to a wholesaler in this State following the effective date will constitute acceptance by the supplier of the terms of the act and be incorporated into the agreement between the supplier and wholesaler. The provision will not apply to any administrative action pending before the Commission or to pending litigation or claims that accrued before September 15, 2010.
The act also changes the definition of a winery for purposes of the Wine Franchise Act. Under existing law, a winery means the holder of an unfortified winery permit, fortified winery permit, limited winery permit, or nonresident wine vendor permit who sells at least 1,000 cases of wine in North Carolina each year; the act increases the number of cases from 1,000 cases annually to 1,250 cases annually. This provision became effective September 15, 2010.
Occupational Licensing Board Change. – The act creates an exception to the law that prohibits occupational licensing boards from requiring that an individual be more than 18 years of age as a condition for receiving a license. The exception applies to certifications issued by the Criminal Justice Education and Training Standards Commission and the North Carolina Sheriff's Education and Training Standards Commission. This provision became effective when the act became law on July 21, 2010.
Rowan-Kannapolis ABC Board. – The act provides for the appointment of three members to the Rowan Kannapolis ABC Board. The Rowan County Board of Commissioners, the Kannapolis City Council, and the Salisbury City Council each will appoint one member of the ABC Chapter 2 Alcoholic Beverage Control
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board. This provision was effective when the act became law on July 21, 2010, and applies to appointments and vacancies occurring on or after that date.
This act becomes effective October 1, 2010, except as otherwise noted. (BC)
Promote North Carolina Distilled Spirits
S.L. 2010-152, Sec. 14.12 (SB 897, Sec. 14.12) requires ABC stores to display spirits distilled in North Carolina in an area dedicated solely to North Carolina products. This section also provides for the issuance of a spirituous liquor tasting permit to the holder of an authorized distillery permit. The distillery may conduct a consumer tasting event on the premises of the distillery subject to the following conditions:
 Any person pouring spirituous liquor at a tasting must be an employee of the distillery and at least 21 years of age.
 The person pouring the spirituous liquor is responsible for checking the identification of patrons being served at the tasting, and samples shall not be offered to, or allowed to be consumed by, any person under the legal age for consuming spirituous liquor.
 Each consumer is limited to tasting samples of 0.25 ounce of each spirituous liquor which total no more than 1.5 ounces of spirituous liquor in any calendar day.
 The consumer is not charged for any spirituous liquor tasting sample.
 The spirituous liquor used in the consumer tasting event is distilled at the distillery where the event is being held.
 A consumer tasting event is not allowed when the sale of spirituous liquor is otherwise prohibited.
This section becomes effective October 1, 2010. (BC) Chapter 2 Alcoholic Beverage Control
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Chapter 3 Children and Families
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Chapter 3
Children and Families
Drupti Chauhan (DC), Wendy Graf Ray (WGR), Susan Sitze (SS)
Enacted Legislation
Protect Victims/Domestic Violence Shelters
S.L. 2010-5 (SB 140) amends the laws pertaining to domestic violence protective orders to make it a Class H felony for a person subject to an order to enter or remain on the premises of a shelter where the protected party is residing. The act also extends limited immunity from civil liability to persons associated with domestic violence protective shelters when there are tortious acts committed on shelter grounds.
Violation of a valid domestic violence protective order is generally a Class A1 misdemeanor. The law provides for higher penalties under certain circumstances. This act provides for aggravated penalties under certain circumstances when a person violates a valid protective order. If a person subject to a valid protective order enters a property used as a safe haven or domestic violence shelter, and is in violation of the order, then the violation is a Class H felony. The offense does not require that any parties protected by the protective order be present on the property.
The act also amends the law to provide that no shelter or person associated with the shelter is liable in tort to a shelter client or any other person on the premises, for any harm that results from the tortious conduct of a perpetrator. This applies where the tortious conduct is committed on the premises of the shelter, and the perpetrator is not a person associated with the shelter. The protection provided by this immunity does not extend to gross negligence, wanton conduct, or intentional wrongdoing on the part of the shelter or person associated with the shelter.
The provision of this act that makes it a Class H felony for a person who is the subject of a protective order to trespass on shelter premises where the protected party resides becomes effective December 1, 2010, and applies to offenses committed on or after that date. The remainder of the act became effective June 7, 2010. (WGR)
Attorney Fees/Alimony
S.L. 2010-14 (SB 59) amends the statute allowing a court to award reasonable attorney fees in actions for alimony or postseparation support. The act deletes language requiring the fees to be "for the benefit of" the applying spouse. The act addresses an issue raised in a North Carolina Supreme Court case where the Court held that attorney fees could not be awarded to a defendant spouse who was represented by pro bono counsel, because the fees were for the benefit of counsel and not the spouse. A two-justice dissenting opinion argued that this was not the intent of the General Assembly and maintained a broader, less restrictive interpretation of the phrase "for the benefit of" was required. This act deletes the language in question from the statute, eliminating any confusion over the interpretation of the phrase.
This act becomes effective October 1, 2010, and applies to fees for services rendered on or after that date. (WGR) Chapter 3 Children and Families
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Responsible Individuals List/Abuse and Neglect
S.L. 2010-90 (SB 567) requires that an individual be given an opportunity for notice and judicial review prior to being placed on a list of individuals determined to be responsible for the abuse or serious neglect of children. The act is in response to a recent North Carolina Court of Appeals decision that declared the prior process for placement on and expunction from the list to be unconstitutional.
In 2005, the Department of Health and Human Services (DHHS) was required to maintain a list of individuals determined to be responsible for the abuse or serious neglect of children, the responsible individuals list (RIL). DHHS is permitted to provide information from the RIL to child care institutions, child placing agencies, group home facilities, and other providers of foster care, child care, or adoption services that need to determine the fitness of individuals to care for or adopt children. Prior to this act, an individual was placed on the RIL after an investigative assessment resulted in a determination of abuse or serious neglect. The investigative assessment did not provide for notice to, or an opportunity to be heard by, the individual. After placement on the list, the individual was permitted to request that the individual's name be expunged from the RIL. In the case of In re W.B.M., 690 S.E.2d 41 (N.C. App. 2010), the North Carolina Court of Appeals considered a challenge to the procedure for placing an individual on the RIL. The Court held that the statutory RIL procedures were unconstitutional and violated the individual's due process rights.
This act eliminates the prior expunction process for individuals placed on the RIL, and instead creates a process for judicial review prior to the individual being placed on the RIL, which includes the following provisions:
 An individual identified as a responsible individual may be placed on the RIL only after one of the following:
 The individual was properly notified of the determination and failed to file a petition for judicial review in a timely manner.
 The court determines that the individual is a responsible individual as a result of a hearing either on the individual's petition for judicial review, or on a juvenile petition that alleges and seeks a determination that the individual is a responsible person.
 The individual is criminally convicted as a result of the same incident.
 The identified individual must be given notice that, unless the individual petitions for judicial review, the individual's name will be placed on the RIL.
 The individual is required to file for judicial review within 15 days of receipt of the director's determination. The standard of review for the hearing is a preponderance of the evidence of abuse or serious neglect and of the identification of the individual. The director, upon receipt of a notice of hearing for judicial review, is required to review the information and, if after the review determines there is not sufficient evidence, must prepare a written statement and give notice to the individual and the court, cancelling the hearing.
 The act defines serious neglect as conduct, behavior, or inaction of the juvenile's parent, guardian, custodian, or caretaker that evidences a disregard of consequences of such magnitude that the conduct, behavior, or inaction constitutes an unequivocal danger to the juvenile's health, welfare, or safety, but does not constitute abuse.
This act became effective July 11, 2010. (WGR)
Expand Access/Confidential Intermediaries
S.L. 2010-116 (HB 1463) expands access to confidential intermediary services from an adoption agency for facilitation of contact or to obtain identifying adoption information. It also Chapter 3 Children and Families
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allows an agency acting as a confidential intermediary to obtain a copy of a death certificate of the person who is the subject of the search and deliver it to the person requesting services.
In North Carolina, adoption records are closed. The law provides that, with certain exceptions, no one may release a record that would lead directly to the identity of an adoptee, an adoptive parent of an adoptee, an adoptee's parent at birth, or an adoptee's birth sibling or grandparent. Exceptions are available through a court order, through voluntary consent, or through the services of a confidential intermediary. To facilitate contact or share the information, the confidential intermediary must have the written consent of all parties.
This act amends and expands the law pertaining to confidential intermediaries as follows:
Definition of "confidential intermediary". – The act amends the definition of "confidential intermediary" to define the term as an agency (licensed child placing agency or a county department of social services) that may act as a third party to facilitate the sharing of information authorized by statute.
Definition of "adult". – The act deletes the provision that defined "adult" as someone 21 or older for purposes of the provisions relating to the use of confidential intermediaries. This means that the general definition of "adult" applies; an adult is 18 or older, or a person under 18 who either is married or legally emancipated.
New Categories of People Added. – Prior to this act, confidential intermediary services were available to a biological parent or adult adoptee or adult lineal descendant of a deceased adoptee. This act amends the list of people authorized to use confidential intermediary services to include the following:
 An adult biological sibling of an adult adoptee.
 An adult biological half sibling of an adult adoptee.
 An adult family member of a deceased biological parent.
 An adult family member of a deceased adoptee.
"Family member" is defined in the act as a spouse, child, stepchild, parent, stepparent, grandparent, or grandchild. If the biological parent is living, written consent of the biological parent is required before contact with or sharing of identifying information between any of the other specified parties. The act also allows an agency to act as a confidential intermediary for the guardian of a minor adoptee.
Access to Death Certificate. – The act provides that, if a confidential intermediary determines that the person who is the subject of the search is deceased, the agency may obtain a copy of the death certificate and deliver it to the person who requested the services.
This act becomes effective October 1, 2010. (WGR)
Improve Child Care Nutrition/Activity Standards
S.L. 2010-117 (HB 1726). See Health and Human Services.
Studies
Regulation of Beauty Pageants for Youth
S.L. 2010-152, Sec. 2.17 (SB 900, Sec. 2.17) authorizes the Legislative Research Commission to study the regulation of beauty pageants for youth under 13 years of age in North Carolina.
This section became effective July 22, 2010. (WGR) Chapter 3 Children and Families
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Chapter 4 Civil Law and Procedure
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Chapter 4
Civil Law and Procedure
Erika Churchill (EC), Tim Hovis (TH), Brad Krehely (BK)
Enacted Legislation
Homeowner and Homebuyer Protection Act
S.L. 2010-164 (SB 1015). See Commercial Law and Consumer Protection.
Studies
Study Comparative Negligence and Joint and Several Liability
S.L. 2010-152, Part XXXV (SB 900, Part XXXV) established the Joint Select Committee to Study the Adoption of Comparative Negligence and Abrogation of Joint and Several Liability. The Committee consists of ten members, including five Senators appointed by the President Pro Tempore of the Senate, and five members of the House of Representatives appointed by the Speaker of the House of Representatives. The Committee must study issues involving the adoption of comparative negligence, the abrogation of joint and several liability, and other issues related to tort liability. The Committee may make a final report, including any proposed legislation, to the 2011 General Assembly upon its convening. The Committee terminates upon the filing of its final report or upon the convening of the 2011 General Assembly, whichever occurs first.
This part became effective July 22, 2010. (BK) Chapter 4 Civil Law and Procedure
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Chapter 5 Commercial Law and Consumer Protection
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Chapter 5
Commercial Law and Consumer Protection
Cindy Avrette (CA, Drupti Chauhan (DC), Karen Cochrane-Brown (KCB), Heather Fennell (HF),
Tim Hovis (TH), Jeff Hudson (JH), Brad Krehely (BK), William Patterson (WP)
Enacted Legislation
Amend Cemetery Act
S.L. 2010-102 (SB 18) makes several changes to the North Carolina Cemetery Act. The act prohibits the North Carolina Cemetery Commission from approving a change of control of a cemetery company until the applicant provides sufficient evidence that appropriate merchandise and preconstruction trust accounts are maintained, or performance bonds have been obtained in lieu of those accounts in an amount sufficient to cover all payments made by purchasers who have not received the purchased property and services. It provides that funds in a perpetual care trust account must be invested by the trustee in the same manner as other fiduciaries according to the prudent person rule in G.S. 32-71. The act requires a cemetery company to list the cost of opening and closing each grave space in its contracts, and prohibits a cemetery company from requiring a purchaser of a grave space or mausoleum to purchase a vault from a particular seller. The act increases from one to three years the extension that may be given to a cemetery company for completion of construction of mausoleums and belowground crypts. Finally, the act authorizes the creation of a study commission to study various issues related to the regulation of cemeteries under the North Carolina Cemetery Act.
The section of the act which authorizes the study commission became effective July 20, 2010. The remainder of the act becomes effective October 1, 2010. (KCB)
Homeowner and Homebuyer Protection Act
S.L. 2010-164 (SB 1015) provides greater protection to homeowners and homebuyers by restricting and/or regulating certain real estate practices.
Home Foreclosure Rescue Scams
The act prohibits foreclosure rescue transactions by anyone, for financial gain or with the expectation of financial gain, other than the transferor unless the transferee pays at least 50% of fair market value of the property when the property is transferred. A foreclosure rescue transaction is a transfer of residential real property, including a manufactured home, which includes all of the following:
 The real property is the principal residence of the transferor.
 The transferor is in default or foreclosure proceedings have been initiated against the property.
 The transferee makes representations that the transfer of the property will prevent foreclosure and enable the transferor to remain in the home.
 The transferor retains an interest in the property conveyed.
A foreclosure rescue transaction contract must be in writing and contain all of the terms to which the parties have agreed. A violation of the act is an unfair and deceptive practice under G.S. 75-1.1, however, an individual homeowner selling his or her primary residence is not subject to liability under G.S. 75-1.1.
Option to Purchase Contracts with Lease Agreements
The act enacts a new chapter to regulate option contracts containing an option to purchase real property which includes, is combined with, or is executed in conjunction with a Chapter 5 Commercial Law and Consumer Protection
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residential lease agreement. Every option contract must be in writing and contain all the terms agreed to by the parties, as well as certain terms specified in the statute. The seller must record a copy of the contract or a memorandum of the contract with the register of deeds of the county in which the property is located within five business days after the contract has been signed. If the contract is forfeited, the purchaser's equitable right of redemption can be extinguished by a mutual termination agreement or a court order. The purchaser's right to exercise the option cannot be forfeited unless a breach has occurred, and the purchaser must be given at least 30 days' notice of the default and intent to forfeit before action is taken. Also, the purchaser has the right to cure the default at least once in every 12-month period during the term of the lease. If the property is encumbered and the option seller defaults on the loan secured by the property, the purchaser may elect to exercise the option or cancel the contract and receive a refund of the money paid, minus an offset for the rental value and for any damages beyond normal wear and tear. A violation is an unfair trade practice under G.S. 75-1.1.
Contract for Deed
The act enacts a new chapter to regulate contracts for deed, in which a seller agrees to sell an interest in property to a purchaser, and the purchaser agrees to pay the purchase price in five or more payments, exclusive of the down payment; the seller retains the title to the property as security for the purchaser's obligation under the agreement. Every contract for deed must be in writing, signed by all parties, and contain all of the terms agreed to, as well as certain terms specified in the agreement. The seller must record a copy of the contract or a memorandum of the contract with the register of deeds of the county in which the property is located within five business days after the contract has been signed. If the contract is forfeited, the purchaser's equitable right of redemption can be extinguished by a mutual termination agreement or a court order. The purchaser's rights under the contract for deed cannot be forfeited unless a breach has occurred, and the purchaser must be given notice of the default and intent to forfeit before action is taken. The purchaser also must be given at least 30 days to cure the default. The notice of default and intent to forfeit must contain specific information, including a description of each default and an itemized statement of all payments in default, or for defaults not involving failure to pay money, the action required to cure the default. The notice must be delivered to the purchaser in a manner authorized for service of process in a civil action. At least once in every 12-month period, the seller must provide the purchaser with a statement of account.
A seller may not enter a contract for deed if the seller does not hold title to the property. If the seller's title is encumbered, the seller may enter a contract for deed only if one of the following conditions is met:
 The encumbrance was agreed to by the purchaser, in writing, to make improvements on the property.
 The encumbrance was placed on the property prior to the contract of deed, if the seller is a licensed general contractor, licensed manufactured home dealer, or licensed real estate broker who continues to make timely payments.
 The encumbrance was placed on the property prior to the contract of deed, if the seller is not a licensed general contractor, licensed manufactured home dealer, or licensed real estate broker, if the lien is attached only to the property sold to the purchaser, and the seller continues to make timely payments.
A seller may not charge a late fee in excess of 4% of the past due amount under a contract for deed. The late fee may not be charged until the payment is more than 15 days past due. A violation is an unfair trade practice under G.S. 75-1.1
This act becomes effective October 1, 2010, and applies to transactions entered on or after that date. (KCB)
Extend Emergency Foreclosure Program
S.L. 2010-168 (SB 1216) amends the Emergency Program to Reduce Home Foreclosures Act, and creates the State Home Foreclosure Prevention Trust Fund. Chapter 5 Commercial Law and Consumer Protection
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S.L. 2008-226 created an "Emergency Program to Reduce Home Foreclosures." The program established a system by which mortgage servicers are required to identify certain subprime loans that are in jeopardy of foreclosure and submit information on those loans to a database housed within the Administrative Office of the Courts (AOC). The Commissioner of Banks uses the information from the database to attempt to find solutions for homeowners to avoid foreclosure, and is authorized to extend the foreclosure process for up to 30 days in appropriate cases. The program became effective November 1, 2008, and was set to expire on October 31, 2010. Initially, the program applied only to subprime home loans that were originated between January 1, 2005, and December 31, 2007. This act makes the program applicable to all home loans in the State in which the borrower is facing foreclosure and extends the expiration date until May 31, 2013.
The act creates the State Home Foreclosure Prevention Trust Fund, to be managed and maintained by the Commissioner of Banks. It provides that upon filing the information required for the database, mortgage servicers are required to pay a fee of $75 to the Fund. The Fund can be used only for specified purposes related to implementing the Program. The Commissioner is given discretion to enter agreements with other State and federal programs aimed at foreclosure prevention.
The act amends the S.A.F.E. Mortgage Licensing Act to increase the fee for licensing a principal or branch office of a mortgage broker or mortgage lender from $125 to $300, to increase the branch office renewal fee from $125 to $300, and to increase the renewal fee for licensed mortgage loan originators from $67.50 to $125. The Commissioner of Banks is authorized, under the S.A.F.E. Mortgage Licensing Act, to charge a new administrative processing fee not to exceed $75.
In addition, the act amends the Predatory Lending law to exclude a portion of the upfront fees paid to the Federal Housing Administration, the Veterans Administration, or the United States Department of Agriculture from the calculation of the total amount of points and fees that can be charged on a home loan before it becomes a high cost loan. A loan becomes a high cost loan if the total amount charged as points and fees exceeds 5% of the total loan amount. Fees paid to a federal agency that guarantees or insures a loan are included in this calculation. The act excludes the portion of the fees paid to federal agencies, or for private mortgage insurance premiums that exceeds 1.25% of the total loan amount from the calculation of points and fees paid by the borrower. It also reduces the threshold for points and fees from 5% to 4%.
Provisions relating to the Emergency Program to Reduce Home Foreclosures become effective November 1, 2010, and expire May 31, 2013. Provisions relating to the S.A.F.E. Mortgage Licensing Act and the Predatory Lending Act, become effective September 1, 2010. The remainder of this act became effective August 2, 2010. (KCB)
Low-Profit Limited Liability Company
S.L. 2010-187 (SB 308) recognizes a new type of corporate designation for a limited liability company (LLC) that requires operation of the company in accordance with these three requirements:
 To accomplish one or more charitable or educational purposes within the meaning of Section 170(c)(2)(B) of the Internal Revenue Code.
 To operate so that no significant purpose of the company is the production of income or the appreciation of property.
 To operate so that no purpose of the company is to accomplish one or more political or legislative purposes within the meaning of Section 170(c)(2)(D) of the Internal Revenue Code.
A LLC that chooses to put these conditions on its operations by including them in its articles of organization and by operating in accordance with them may, under this act, call itself a Chapter 5 Commercial Law and Consumer Protection
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"low-profit limited liability company" and use the designation "L3C". Like a LLC, a L3C is subject to federal and State tax, and investments in a L3C are not tax deductible.
The formation of a L3C is designed to facilitate program-related investments (PRI) by private foundations. Private foundations must distribute at least 5% of their capital for charitable purposes to maintain their nonprofit status. Although foundations often expend these funds through grants, they also may meet the expenditure requirement with Internal Revenue Service-sanctioned PRIs. A PRI is an investment that supports charitable activities but may involve the potential return of capital. An example of a PRI is a loan, a loan guarantee, and an equity investment in a charitable organization. Foundations do not usually make PRIs without an IRS private letter ruling that the investment meets the IRS requirements as an acceptable PRI. The expense of obtaining a private letter ruling deters foundations from this form of investment. The founders of the L3C designation hope that the IRS or Congress will choose to treat an investment in a L3C as a PRI without the need for a private letter ruling, because the three requirements to form as a L3C mirror the IRS requirements for a PRI. Neither the IRS nor Congress has evidenced any movement on this issue.
This act became effective August 3, 2010. (CA)
No Foreclosure/Soldiers on Active Duty/Funds
S.L. 2010-190 (SB 1400) prohibits foreclosures under a power of sale during, or within 90 days after, a debtor's period of military service, and requires a foreclosing party to certify to the clerk that that the debtor is not on active military duty before a foreclosure hearing can be scheduled.
The prohibition applies to mortgagees, trustees, or other creditors attempting to exercise powers of sale contained in a mortgage or deed of trust, or provided by statute. For powers of sale pursuant to a mortgage or deed of trust, the prohibition applies only to mortgages or deeds of trust that originated prior to the debtor's period of military service. The debtor's rights under this section can be waived in writing by separate instrument executed during or after the debtor's period of military service.
The act also amends requires foreclosing parties to notify debtors that foreclosure may be prohibited if the debtor is on military duty, and requires the clerk to find that a power of sale foreclosure is not barred by this act before authorizing the foreclosure proceeding.
This act becomes effective January 1, 2011, and applies to foreclosures initiated on or after that date. (WP)
Studies
Legislative Research Commission (LRC)
Use of "Most Favored Nation" Clauses
S.L. 2010-152, Sec. 2.16 (SB 900, Sec. 2.16) authorizes the LRC to study the use of "Most Favored Nation" (MFN) clauses in contracts, including:
 The extent to which MFN clauses are included in contracts in the State and in the nation as a whole.
 The most common forms and elements of MFN clauses.
 The effect of inclusion of MFN clauses in contracts.
 The effect that prohibiting the use of MFN clauses in contracts has had in those states that have prohibited their use. Chapter 5 Commercial Law and Consumer Protection
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 Any other issue relating to the use or prohibition of MFN clauses that the LRC deems appropriate.
This section became effective July 22, 2010. (KCB)
New/Independent Studies/Commissions
Study Commission on Expansion of the Life Sciences Industry and Related Job Creation
S.L. 2010-152, Part XXXVII, Secs. 37.1 – 37.4 (SB 900, Part XXXVII, Secs. 37.1 – 37.4) establishes the Study Commission on the Expansion of the Life Sciences Industry and Related Job Creation. The Commission is authorized to examine issues related to:
 The need for additional sources of financing for life science companies to finance facilities and equipment for the manufacture, production, or warehousing of life science products and services in the State and other facilities for the production and delivery of life science products and services in the State.
 The legislative proposals contained in SB 580 (North Carolina Life Science Development Corporation Act) and HB 530 (Life Sciences Development Act) of the 2009-2010 legislative sessions.
The Commission is directed to make its final report together with any proposals to the General Assembly by February 1, 2011. The Commission terminates upon filing its final report or February 1, 2011, whichever is earlier.
This section became effective July 22, 2010. (KCB) Chapter 5 Commercial Law and Consumer Protection
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Chapter 6 Constitution and Elections
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Chapter 6
Constitution and Elections
Denise Huntley Adams (DHA), Erika Churchill (EC), Bill Gilkeson (BG), Kara McCraw (KM)
Note: For legislation affecting voting, the legislation cannot be implemented until it has received approval under Section 5 of the Voting Rights Act of 1965. Approval is most commonly obtained administratively from the United States Attorney General. This requirement applies to legislation affecting any of the 40 North Carolina counties covered by Section 5, including all Statewide legislation. Unless otherwise indicated, the effective date stated is the effective date as it is in the legislation. The act cannot be implemented until Voting Rights Act approval is obtained.
Enacted Legislation
No Felon as Sheriff*
S.L. 2010-49 (HB 1307) proposes to amend Section 2 of Article VII of the North Carolina Constitution to provide that no person convicted of a felony against this State, the United States, or another state is eligible to serve as Sheriff, whether or not that person has had citizenship rights restored under the law. "Convicted of a felony" includes the entry of a guilty plea; a verdict or finding of guilt by a jury, judge, magistrate, or other adjudicating body, tribunal, or official, either civilian or military; or a plea of no contest, nolo contendere, or the equivalent.
Currently, Section 8 of Article VI of the Constitution disqualifies a person from elective office generally if that person has been convicted of a felony and has not had citizenship rights restored according to law. Chapter 13 of the General Statutes provides that a felon's citizenship rights are automatically restored upon completion of their sentences.
Like all proposed amendments to the State Constitution, the one proposed in this act is subject to a statewide referendum. The act sets the referendum on November 2, 2010, the date of the general election.
If the voters approve the proposal, the amendment becomes effective upon the certification of the referendum results. (BG)
Designation of Uses of Campaign Funds
S.L. 2010-100 (HB 1136) authorizes the personal representative of a candidate who did not file a written designation for the permitted uses of remaining campaign funds to do so within 90 days of the date of death. The personal representative is limited to directing those funds to 501(c)(3) charitable organizations.
The bill amends the 2006 act that placed limits on the uses candidates and candidate campaign committees can make of the funds in their campaign accounts. The 2006 act provided that the funds in a campaign account at the time of a candidate's death would escheat to the State unless the candidate, before death, had filed a statement providing a different designation.
This act became law effective July 20, 2010. For any candidate campaign committee that was active status with the State Board of Elections on that date, the personal representative of the estate may file the written designation within 90 days of the day this act receives preclearance under Section 5 of the Voting Rights Act. (BG) Chapter 6 Constitution and Elections
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Limitation on the Use of Public Funds
S.L. 2010-114, Sec. 1.5 (HB 593, Sec. 1.5) prohibits counties, municipalities, and local boards of education from using public funds to endorse or oppose a referendum, election, or a particular candidate for elective office.
This section became effective July 20, 2010, and applies beginning with the 2010-2011 school year. (KM)
Government Ethics and Campaign Reform Act of 2010
S.L. 2010-169 (HB 961) made various changes to the campaign finance laws, public records laws, ethics laws, and lobbying laws as follows:
 Makes it unlawful for a member of the Council of State to coerce political contributions or support by threatening discipline or promising preferential treatment to the following groups of people: Persons doing or seeking to do business with the Council of State member's department; persons engaged in activities that are regulated or controlled by the Council of State member's department; or persons who have financial interests that may be affected substantially by the performance or nonperformance of the Council of State member's official duties. A violation is a Class 2 misdemeanor.
 Prohibits public officers or employees involved in making or administering a contract on behalf of a public agency from soliciting or receiving favors, services, and promises of future employment in exchange for recommending, influencing, or attempting to influence the award of the contract.
 Expands the prohibition on bribery of officials to include a prohibition on those who have filed a notice of candidacy for or have been nominated for such office.
 Provides that certain unlawful campaign contributions, including giving in the name of another, anonymous contributions, and contributions by corporations, business entities, labor unions, professional associations, or insurance companies to candidates or political committees or to compensate, reimburse, or indemnify an individual for money or property for making contributions or expenditures which total more than $10,000 per election are a Class I felony. This prohibition shall not apply to contributions by individuals with the lawful authority to act on behalf of another individual.
 Adds the State Board of Elections to the administrative hearing process for the purposes of investigations and audits required of the Board under Chapter 163 of the General Statutes.
 Mandates that the State Board of Elections create an easily searchable database to provide the public with access to the database to search by geographic location, occupation, employer, contributor, or contributee, within an election cycle and over a period of time as specified by the searcher.
 Codifies the Governor's Executive Order Number 4 to require the Office of State Budget and Management and Information Technology Services to build and maintain a single, searchable website and database on State spending for grants and contracts awarded in amounts in excess of $10,000. Information provided for each contract or grant shall include: The name of the entity receiving the award; the amount of the award; the location of the entity receiving the award; expected outcomes of the contract or grant, and specific deliverables required; and contact information for the responsible state government officer or administrator of the contract or grant.
 Adds the following as public servants: The Executive Director and Assistant Executive Director of the State Ethics Commission; the Director of the Office of State Chapter 6 Constitution and Elections
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Personnel; the State Controller; the Chief Information Officer and Deputy Chief Information Officers, Chief Financial Officers, and General Counsel of the Office of Information Technology; the Director of the State Museum of Art; the Executive Director of the Agency for Public Telecommunication; the Commissioner of Motor Vehicles; the Commissioner of Banks and Chief Deputy Commissioners of the Banking Commission; the Executive Director of the North Carolina Housing Finance Agency; and the Executive Director, Chief Financial Officer, and Chief Operating Officer of the North Carolina Turnpike Authority.
 Adds the Governor's Crime Commission as a covered board, which means its members are public servants under the State Government Ethics Act.
 Requires a covered person to file a statement of economic interest in the year following the year that a covered person resigns or does not file a notice of candidacy or petition for election.
 Makes various changes to the annual statement of economic interest required to be filed by covered persons, as follows:
 Removes the requirement that statements of economic interest be sworn.
 Permits any filing person to list just the initials of an unemancipated child in the statement of economic interest, and provide the full name of the child in a confidential document to the State Ethics Commission.
 Adds sole proprietorships to the list of business entities that must be listed on the statement of economic interest.
 Clarifies that the statement of economic interest should include the name of each business with which the filing person or filing person's immediate family is an employee, director, officer, partner, proprietor, member or manager, and identifies which of these businesses do business with the State.
 Adds a requirement that the statement of economic interest form include a question to list contributions to the appointing Council of State member totaling more than $1,000 in the preceding year.
 Adds a requirement that the statement of economic interest form include a yes/no question as to whether the filing person engaged in certain campaign related activities in the preceding calendar with the respect to or on behalf of the candidate or candidate campaign committee of the covered person who appointed the filing person. This requirement would apply only to specific filing persons.
These provisions become effective January 1, 2011, and apply to statements of economic interest filed on or after that date.
 Authorizes the Governor to adopt additional and supplemental ethics standards applicable to any gubernatorial appointee to any State board, commission, or similar public body, and to adopt minimum ethics standards applicable to any employee of a State agency. The Governor is required to publish those standards in the North Carolina Register and make them available to each subject appointee or employee.
 Clarifies that an indirect gift prohibited under the gift ban includes gifts where a designated individual is not the sole recipient.
 Mandates that rules adopted by the State Ethics Commission which do not follow the truncated rule-making procedure set out in statute are null, void, and without effect. Also defines rules as any Commission regulation, standard, or statement of general applicability that interprets an enactment by the General Assembly or Congress, a regulation adopted by a federal agency, or that describes the procedure or practice requirements of the Commission.
 Clarifies the definition of lobbyist so that the relationship between a lobbyist and a lobbyist principal is triggered only when the relationship includes payment, and changes the definition of a lobbyist to an individual who engages in lobbying for payment and meets certain criteria. Corresponding changes also are made to the Chapter 6 Constitution and Elections
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definition of lobbyist principal to clarify that a lobbyist principal is a person or governmental unit on whose behalf a lobbyist lobbies and who makes payment for that lobbying. Also requires lobbyist principals to annually report the cumulative combined totals of all payments for lobbying during the registration period, and for certain specific communications and activities used to lobby. These provisions become effective January 1, 2011, and apply to offenses committed on or after that date, and reports filed on or after that date.
 Requires the release of the following information previously held confidential in personnel records of employees of State government, local boards of education, community colleges, area mental health authorities, public health authorities, counties, cities, and water and sewer authorities:
 The date and amount of each salary change.
 The date and type of each promotion, demotion, transfer, or suspension, separation, or other change in position classification.
 The date and general description of the reasons for each promotion.
 The date and type of each dismissal, suspension, or demotion for disciplinary reasons.
 A copy of the written notice of final decision setting forth the specific acts or omissions for a dismissal.
These provisions become effective October 1, 2010.
 Requires the Secretary of State and the State Ethics Commission to publish annual statistics for complaints of violations of the lobbying law, including number of systematic reviews, number of complaints filed, number of apparent violations referred to a district attorney, number of complaints dismissed, and number and age of complaints pending. All civil fines, including the amount of the fine and the identity of the person or governmental unit against whom it was levied, must be public record.
 Exempts anything of value given or received in connection with seeking or hosting a national political party convention from all of the lobbying laws, including the gift ban and reporting provisions.
 Amends the access to public records law by requiring mediation of public records disputes. Voluntary mediation may be initiated prior to suit being filed, and mandatory mediation is required within 30 days from the filing of responsive pleadings with the clerk. The mediation:
 Is initiated by filing a request for mediation with the clerk of court in a county in which the action may be brought on a form prescribed by the Administrative Office of the Courts. Parties must be provided by the clerk with a list of certified mediators from which to select, and if a mediator cannot be agreed upon by the parties, the senior resident superior court judge must appoint a mediator.
 Must be conducted in accordance with the standards for mediated settlements of civil cases. Mediation may be waived if all parties agree and the mediator is so informed in writing. At the conclusion of mediation, the mediator must prepare and file a certification stating the date on which the mediation was concluded and the general results of the mediation.
 Does not preclude parties from seeking injunctive or other relief, including production of public records, prior to the scheduled mediation.
If a party successfully compels the disclosure of public records, the court must allow that party to recover its reasonable attorneys' fees. The court may not assess attorneys' fees against a governmental body or unit if the court finds the governmental body or unit acted in reasonable reliance on a court order, appellate decision, or opinion of the Attorney General. The Chapter 6 Constitution and Elections
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court may not assess fees against a public hospital if the court finds the action was brought by, or on behalf of, a competing health care provider to gain competitive advantage. These provisions become effective October 1, 2010, and apply to actions filed on or after that date.
 Clarifies that sworn complaints filed with the State Ethics Commission can allege violations of the Legislative Ethics Act or certain criminal provisions, and changes the timeframe within which the State Ethics Commission must send a copy of a complaint to the complainant from 30 days to 10 business days. Also changes the timeframe in which the State Ethics Commission must initiate a complaint from 60 days to 10 business days. Requires the State Ethics Commission to conclude a preliminary inquiry of an investigation within 20 business days and allows the Commission to dismiss a complaint that is determined to be frivolous or brought in bad faith.
 Prohibits a legislative employee from disclosing confidential information, and clarifies that a court's authority to compel the testimony of a legislative employee regarding confidential communications or matters related to the legislative process is limited by North Carolina's speech and debate clause, the common law of legislative immunity, and the statute related to the confidentiality of redistricting communications. This provision becomes effective October 1, 2010.
 Mandates the Legislative Ethics Committee to study the need for additional regulations of campaign contributions to State officials and candidates for State office by persons doing business with, or regulated by, the office held by the State official. The Committee also must study the statement of economic interest form required to be filed by covered persons to ensure the form accurately and informatively discloses the required information. The Committee must report its findings and recommendations to the 2011 General Assembly on or before April 1, 2011.
 Establishes the Public Funding of Council of State Elections Commission, with a total of ten members. Five of the members must be appointed by the Speaker of the House of Representatives, including a majority party member, a minority party member, a representative from the North Carolina Chamber, a representative of groups opposing public financing of elections, and an individual who has received public financing for a campaign. Five of the members must be appointed by the President Pro Tempore of the Senate, including a majority party member, a minority party member, an individual in business recommended by a business association other than the North Carolina Chamber, a representative of groups advocating for public financing of elections, and a representative of the North Carolina State Bar. The Commission must study issues related to continuation of public financing for Council of State elections, including examining the existing program, funding and financial needs, whether to expand the program to other Council of State offices, and related legal precedents and constitutional issues. The Commission must report no later than March 1, 2011, to the 2011 General Assembly.
 Makes technical and clarifying changes to the State Government Ethics Act and Lobbying laws.
This act became effective August 2, 2010, except as otherwise noted. Criminal penalties become effective December 1, 2010, and apply to offenses committed on or after that date. (DHA and KM)
Citizens United Response
S.L. 2010-170 (HB 748) makes various changes to the campaign finance statutes in response to the U.S. Supreme Court case, Citizens United v. Federal Election Commission. Chapter 6 Constitution and Elections
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In Citizens United v. Federal Election Commission, 558 U.S. 50 (2010), the U.S. Supreme Court held that the government may not suppress political speech based on the speaker's corporate identity. The Court struck down federal law which prohibited a corporation from making independent expenditures for express advocacy or electioneering communications. The Court did not address the question of whether corporations can be prohibited from making contributions. The Court upheld disclaimer and disclosure requirements for independent expenditures.
The act makes the following changes in response to the Supreme Court decision:
 Definitions. Adds several new definitions to Article 22A of Chapter 163, which covers the regulation of contributions and expenditures in political campaigns, including:
 Coordination and Coordinated expenditure: An expenditure made in concert or cooperation with, or at the request or suggestion of, a candidate, a candidate campaign committee, or the agent of the candidate or candidate campaign committee. An expenditure for the distribution of information relating to a candidate's campaign, positions, or policies that is obtained through publicly available resources is not considered a coordinated expenditure if it is not made at the request of a candidate, a candidate campaign committee, or the agent of the candidate or candidate campaign committee.
 Electioneering communication: Transfers definitions in Articles 22E and 22F of Chapter 163 into Article 22A of Chapter 163, with the following changes:
 Expands the application from statewide and General Assembly candidates to candidates for all offices.
 Covers communication aired or transmitted within 60 days before one-stop (early) voting begins in an election for that office, rather than 60 days before general election day, or 30 days before primary day. Early voting begins on the third Thursday before the election.
 Lowers the coverage threshold from 50,000 to 20,000 households for mass mailings and phone banks in a statewide election.
 Adds to the current exclusions from the definition of "electioneering communication" (1) public opinion polls conducted by a news medium or polling organization (excluding "push polls"), and (2) print communications by news media. "News medium" is as defined in GS 8-53.11, which gives testimonial privileges to journalists for news media.
 Disclosure of Independent Expenditures. Requires independent expenditures to be reported according to the same schedule required of political committees. For large last-minute activity – expenses of $5,000 or more incurred, or donations of $1,000 or more received, to further independent expenditures before an election but after the period covered by the last report due before that election – the act requires 48-hour reporting.
Current law requires the entity making the disclosure also to disclose donations to it of more than $100 for the purpose of furthering an independent expenditure or contribution. The act provides that a donation to the filer of the report is deemed to have been made to further the independent expenditure if it meets any of the following:
 The donor designates, requests, or suggests the donation be used for independent expenditures, and the filer agrees.
 The filer expressly solicits the donation from the donor for an independent expenditure.
 The filer and donor engage in substantial written or oral discussion regarding the donor making an independent expenditure.
 The donor or filer knew or had reason to know of the filer's intent to make independent expenditures or contributions with the transfer. Chapter 6 Constitution and Elections
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Donations are not deemed to be made to further an independent expenditure if the donation was a commercial transaction in the ordinary course of business, absent affirmative evidence that the amount was donated to further an independent expenditure. In determining the amount of a donation that was made to further any particular independent expenditure, any amount that was designated by the donor with respect to a different election than the election that is the subject of the independent expenditure covered by the report is excluded.
The act requires that reports of more than $5,000 in independent expenditures be filed electronically.
 Disclosure of Electioneering Communications. Every individual or person who incurs an expense for the direct costs of producing or airing electioneering communications aggregating in excess of $5,000 (down from $10,000) is required to file with the State Board of Elections a report which includes: The identification of any person(s) incurring the expense; the custodian of the books and accounts and the principal place of business of the person incurring the expense; the amount of each expense incurred; the elections to which each communication pertain; and the names and addresses of all entities that provided anything of value in an aggregate amount of $1,000 to further the electioneering communication.
The initial report must be filed with the Board no later than the 10th day following the day the individual or person incurs an expense for the direct costs of producing or airing an electioneering communication. The Board must require subsequent reporting on the same schedule as reporting required by political committees, including 48-hour reporting of large last-minute activity like that for independent expenditures. The act also requires disclosure of donors like that of independent expenditures, and requires electronic filing with the State Board if the expense incurred is greater than $5,000.
 Requirements for Media Outlets. Provides that every media outlet shall require written authorization for each independent expenditure or electioneering communication, similar to the current requirement for campaign expenditures. All written authorizations are considered public records and must be made available for inspection during the media outlet's normal business hours.
 Repeal of Prohibition on Independent Expenditures by Corporations, Etc. Repeals the prohibition on independent expenditures by corporations, business entities, labor unions, professional associations, and insurance companies to support or oppose the nomination or election of clearly identified candidates.
 Determination by State Board of Elections. Authorizes the Board to establish a process for determining whether a communication is an expenditure, independent expenditure, or electioneering communication prior to the airing or distribution of that communication when requested by an individual or person producing a communication. The responsibility for the determination may be delegated to the Executive Director of the Board. If the responsibility is delegated to the Executive Director, the process established by the Board shall require a written determination by the Executive Director to include stated findings and an opportunity for immediate appeal to the State Board of the determination by the Executive Director.
 Basic Disclosure on Ads. Amends the disclosure requirements for political advertisements to require that a print media, radio, or television advertisement supporting or opposing the nomination or election of one or more clearly identified candidates that constitutes an electioneering communication or independent expenditure must meet existing disclosure requirements for expenditures and contributions. Print media that is an independent expenditure opposing or supporting a clearly identified candidate must disclose the five largest donations to the sponsor within the six months prior to purchase of the ad, and the same Chapter 6 Constitution and Elections
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disclosure must be made for electioneering communications. Size requirements for TV disclosure is changed from 32 scan lines to 4% of vertical picture height.
 TV and Radio Ads. Requires television or radio advertisements which support or oppose the nomination or election of a clearly identified candidate sponsored by corporations with the purpose of promoting social, educational, or political ideas to include the following information:
 Television Ads: A legible on-screen listing indicating with which board of elections donor information may be found.
 Radio Ads: An aural disclosure indicating with which board of elections donor information may be found.
The act also requires electioneering communications on television and radio purchased by an individual to include the same sponsorship disclosures as an independent expenditure.
 No Write-ins in Nonpartisan Runoff. For cities using the nonpartisan election and runoff system, no space for write-in candidates shall be included on the runoff ballot. Effective January 1, 2011.
Except as noted, this act becomes effective upon preclearance under Section 5 of the Voting Rights Act. (EC)
Absentee Voting Changes
S.L. 2010-192 (HB 614) changes North Carolina's law on automatic transmission of absentee ballots to uniformed military personnel, so that an application for an absentee ballot will trigger transmission of ballots to the uniformed voter for all the elections during that calendar year.
The bill reverses a North Carolina law enacted in 2003 to conform to a 2002 federal change. The 2003 law provided that one application by a military person for an absentee ballot would trigger transmission of ballots in all elections through the second general election for federal office after the application is made. In 2009, Congress repealed its 2002 change. Evidence had appeared that sending ballots to the same address of a military person for two elections often resulted in ballots being sent to outdated addresses, since uniformed personnel are so often reassigned. The change in this act re-adapts North Carolina law to the second federal change.
This act became effective on August 4, 2010, but it applies only to applications made after the 2010 general election. The bill must be pre-cleared under Section 5 of the Voting Rights Act before it can be implemented. (BG) Chapter 7 Courts, Justice, and Corrections
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Chapter 7
Courts, Justice, and Corrections
Brenda Carter (BC), Erika Churchill (EC), Tim Hovis (TH), Jeff Hudson (JH)
Kara McCraw (KM), Howard Alan Pell (HAP), Kelly Quick (KQ),
Wendy Graf Ray (WGR), Susan Sitze (SS)
Enacted Legislation
Education for Prison Inmates
S.L. 2010-31, Sec. 8.3 (SB 897, Sec. 8.3). See Education.
Special Proceedings/Partition Filing Time Changes
S.L. 2010-97, Sec. 1 (SB 1242, Sec.1) amends the time requirements for filing pleadings in partition actions to allow for up to 30 additional days, and removes requirement for an affidavit when showing good cause why pleadings filing deadlines applicable to a special proceeding should be enlarged.
This act became effective July 20, 2010. (KQ)
Queries for Legal Status of Prisoners
S.L. 2010-97, Sec. 12 (SB 1242, Sec. 12) removes the requirement that queries regarding the legal status of prisoners be made through the Division of Criminal Information system, and instead requires that such queries be made directly to the federal Immigration and Customs Enforcement Division. The section also removes the requirement for annual reports to the Governor's Crime Commission by facilities on the number and results of the queries.
This section became effective July 20, 2010. (KM)
Modified Drug Treatment Court Probation Judgments
S.L. 2010-97, Sec. 13 (SB 1242, Sec. 13) clarifies that probation judgments modified after December 1, 2009, are subject to the exclusive jurisdiction of the superior court for hearings to revoke probation where the district court is supervising a drug treatment court probation judgment, and that the district court, with the consent of the chief district court judge and the senior resident superior court judge, may exercise supervision over those probation judgments entered in superior court.
This section became effective July 20, 2010. (KM)
Amend Concealed Handgun Permit Laws
S.L. 2010-104 (HB 859) exempts certain retired probation or parole certified officers from the firearm safety and training course requirement for purposes of the concealed handgun permit. To qualify for the exemption the person must apply for the permit within two years following the date of retirement, and must meet all of the following criteria:
 Immediately prior to retirement, the person met applicable firearms training standards and was authorized to carry a handgun in the course of duty.
 The person retired in good standing and was never the subject of a disciplinary action that would have prevented the person from carrying a handgun. Chapter 7 Courts, Justice, and Corrections
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 The person has a vested right to benefits under the Teachers' and State Employees' Retirement System of North Carolina.
 The person is not prohibited by State or federal law from receiving a firearm.
This act becomes effective December 1, 2010, and applies to probation and parole certified officers who retired before, on or after that date. (BC)
Determining Senior Resident Superior Court Judge
S.L. 2010-105 (HB 1398) authorizes the Chief Justice of the Supreme Court to designate the senior resident superior court judge for a district or set of districts if there are two or more regular resident superior court judges in that district or set of districts. The Chief Justice is to consider the seniority, experience, and management competence of the judges when making the selection. Under existing law, if there are two or more regular resident superior court judges in a district or set of districts, the judge with the most continuous service as a regular resident superior court judge serves as the senior resident superior court judge, and if two judges are of equal seniority, the oldest of the judges serves as the senior regular resident superior court judge.
This act becomes effective October 1, 2010, and provides that senior resident superior court judges seated on that date in multi-judge districts continue to serve until the judge vacates the seat. (TH)
Domestic Violence Training for Judges
S.L. 2010-106 (HB 1762) requests that the North Carolina Supreme Court adopt rules establishing minimum standards of education and training for district court judges handling civil and criminal domestic violence cases. The act also encourages The University of North Carolina School of Government to provide education and training opportunities for district court judges and magistrates in the handling of civil and criminal domestic violence cases. The act was a recommendation of the Joint Legislative Committee on Domestic Violence.
This act became effective July 20, 2010. (WGR)
Allow Electronic Parole Notification
S.L. 2010-107 (HB 1115) allows for electronic notification, rather than notice by first class mail, to the media whenever the Post Release Supervision and Parole Commission is considering parole for a person serving a life sentence if such notification would be more timely and cost effective. The other entities that must be notified, including victims and law enforcement, will continue to receive notice by first class mail.
This act became effective July 20, 2010. (EC)
Domestic Violence Cases/Review Criminal Record
S.L. 2010-135 (HB 1812) requires that a law enforcement agency or the prosecutor provide a defendant's criminal history record to a judicial official considering pretrial release conditions where the defendant has been charged with an offense under the domestic violence crimes statute, G.S. 15A-534.1. The judicial official shall consider the record in determining conditions of pretrial release, and then return the record to the agency providing it.
This act becomes effective October 1, 2010. (HAP) Chapter 7 Courts, Justice, and Corrections
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Amend Innocence Inquiry Commission
S.L. 2010-171 (SB 144) amends the 2006 law establishing the North Carolina Innocence Inquiry Commission (Commission) as follows:
 Requires the Chief Justice of the Supreme Court to appoint the post-Commission judicial panel within 20 days of the filing of the opinion of the Commission finding sufficient evidence of factual innocence to merit judicial review.
 Provides if there is an allegation of, or evidence of, prosecutorial misconduct in the case, the Chair of the Commission or the district attorney of the district of conviction may request the Director of the Administrative Office of the Courts (Director) to appoint a special prosecutor to represent the State in lieu of the district attorney of the district of conviction or the district attorney's designee. Upon receipt of a request to appoint a special prosecutor, the Director may temporarily assign a district attorney, assistant district attorney, or other qualified attorney, including one from the prosecutorial district where the convicted person was tried, to represent the State at the hearing before post-Commission judicial panel. The Director may not appoint as special prosecutor any attorney who prosecuted or assisted with the prosecution in the trial of the convicted person.
 Provides the State will have 90 days from the date of the order of the senior resident superior court judge setting the case for hearing to file a response to the Commission's opinion. The response may include joining the defense in a motion to dismiss the charges with prejudice on the basis of innocence.
 Provides the defense and prosecution may compel the testimony of any witness and that all evidence relevant to the case, even if considered by a jury or judge in a prior proceeding, may be presented during the hearing.
 Provides that a person who is determined by the post-Commission judicial panel to be innocent of all charges and against whom all charges are dismissed is eligible for compensation without obtaining a pardon from the Governor. A claim against the State for compensation for loss sustained through erroneous conviction and imprisonment must be made within five years of the date of dismissal of the charges.
 Removes the limitation contained in the 2006 law establishing the Commission that provided that the law applied only to claims of factual innocence filed on or before December 31, 2010.
The provisions of this act related to the hearing process of the post-Commission judicial panel become effective October 1, 2010, and apply to claims of factual innocence filed on or after that date. The remainder of the act became effective August 2, 2010. (JH)
Clarify Expunctions
S.L. 2010-174, Secs. 1-15 (HB 726, Secs. 1-15) make a variety of changes, mostly technical and conforming, to the statutes related to expunction of criminal records. During the 2009 Session, the General Assembly adopted S.L. 2009-510 (SB262) and S.L. 2009-577 (HB1329), which dealt with expunction issues. Both of the two bills were ratified on August 11, 2009, but were not reconciled with each other, resulting in some inconsistencies in various expunction statutes. Additionally, there was an error in the version of S.L. 2009-510 that was adopted on the House floor, resulting in several corrections to the bill not being adopted.
 Corrections due to incorrect version of S.L. 2009-510 adopted by House. –These sections add additional language relating to expunction of records by private entities. This is language that was omitted by the adoption of the incorrect version of the bill in 2009.
 Remove affidavit requirement/Add criminal background check. – These sections delete the requirement to provide affidavits from the clerk of superior court, Chapter 7 Courts, Justice, and Corrections
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chief of police, and sheriff attesting that the applicant for an expunction has no disqualifying convictions. These sections instead require a name-based State and national background check and a search of Administrative Office of the Courts confidential expunction files.
 Other technical and clarifying changes. – These sections amend a new expunction provision authorized by S.L. 2009-577, allowing the expunction of misdemeanor larceny convictions. These sections correct an inconsistency in the law by requiring a 15-year period before the expunction petition may be filed. Additionally, the Division of Motor Vehicles is not required to expunge records that are prohibited from being expunged by federal law requirements for motor vehicle records.
 Technical and clarifying changes to reconcile S.L. 2009-510 (SB 262) and S.L. 2009-577 (HB1329). – These sections make additional technical and clarifying changes necessary to reconcile the two expunction bills that passed in 2009.
The provisions relating to expunction of information by private entities and the Division of Motor vehicles become effective October 1, 2010. The remainder of the sections become effective October 1, 2010, and apply to petitions for expunction filed on or after that date. (SS)
Require Certain Sex Offenders to Register
S.L. 2010-174, Sec. 16 (HB 726, Sec. 16). See Criminal Law and Procedure.
Courts-Martial Amendments
S.L. 2010-193 (HB 1412). See Military, Veterans, and Indian Affairs.
Referrals to Existing Commissions/Committees
Unsecured Bonds
S.L. 2010-152, Secs. 10.1 and 10.2 (SB 900, Secs. 10.1 and 10.2) authorize the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee to study the topics listed below, and report findings with any recommended legislation, to the 2011 Regular Session of the General Assembly:
 Factors used in determining the release of defendants with unsecured bonds.
 Frequency of using unsecured bonds.
 Failure to appear rates under unsecured bonds.
 Amount of time and entity most likely to apprehend a defendant after bond forfeiture.
 Likelihood of converting forfeiture or judgment to revenue.
These sections became effective July 22, 2010. (HAP)
Extend Joint Select Committee on Preservation of Biological Evidence
S.L. 2010-152, Sec. 24 (SB 900, Sec. 24) amends the Session Law creating the Joint Select Committee on Preservation of Biological Evidence to extend the Committee until the convening date of the Regular Session of the 2011 General Assembly, or the filing of the Committee report, whichever occurs first. The Committee's charge includes a review of matters related to the preservation of DNA and biological evidence, including: Chapter 7 Courts, Justice, and Corrections
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 Costs associated with the promulgation of minimum guidelines for the retention and preservation of biological evidence.
 Emerging technologies with regard to the retention and preservation of biological evidence.
 Procedures for the interagency transfer of biological evidence.
This section became effective July 22, 2010. (HAP) Chapter 7 Courts, Justice, and Corrections
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Chapter 8 Criminal Law and Procedure
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Chapter 8
Criminal Law and Procedure
Brenda Carter (BC), Drupti Chauhan (DC), Kara McCraw (KM), Jennifer McGinnis (JLM),
Howard Alan Pell (HAP), Kelly Quick (KQ), Steve Rose (SR), Susan Sitze (SS)
Enacted Legislation
Susie's Law
S.L. 2010-16 (SB 254) increases the penalties for certain types of animal abuse.
The act increases the penalty for maliciously killing an animal by intentional deprivation of necessary sustenance from a Class A1 misdemeanor to a class H felony. Additionally, the penalty for maliciously torturing, mutilating, maiming, cruelly beating, disfiguring, poisoning, or killing an animal is increased from a Class I felony to a Class H felony.
This act becomes effective December 1, 2010, and applies to offenses committed on or after that date. (SS)
Collect DNA Sample on Arrest
S.L. 2010-94 (HB 1403) enacts "The DNA Database Act of 2010." The act requires that a DNA sample be taken from any person arrested for an offense listed in the act, and amends the statutes that provide for a DNA sample upon conviction of all felonies. Currently, 23 states and the federal government have DNA upon arrest statutes.
The DNA samples taken upon arrest will be analyzed, and a record which can identify only the individual who provided the sample will be stored in the State's DNA Database. A search of all state databases against unknown DNA samples connected to crime scenes is conducted weekly by using the Combined DNA Index System (CODIS), administered and operated by the Federal Bureau of Investigation.
 Collection. – An arresting officer either takes, or arranges for another to take, a DNA sample from the person upon arrest, or when the person is fingerprinted at booking.
 The sample is taken by cheek swab, unless a court authorizes that a blood sample be taken.
 If the arrest was made without a warrant, the DNA sample may not be taken until a magistrate has found probable cause that a crime was committed, and that the arrested person committed it.
 The offenses calling for a DNA sample include murder, manslaughter, rape or sex offenses, felony assaults with a deadly weapon or causing serious bodily injury, kidnapping or human trafficking, burglary offenses, arson, armed robbery, stalking, cyberstalking, and any offense which would require the person to register as a sex offender. The act applies to anyone arrested for attempting, soliciting, conspiring, or aiding and abetting another to commit a listed offense.
 If a juvenile is charged for an offense covered under the DNA upon arrest statute, then a DNA sample is obtained when the matter is transferred to superior court.
 It is a condition of pretrial release that a defendant provide fingerprints and, if the offense is listed in the act, a DNA sample.
 Expunction. – Records and samples relating to a defendant’s DNA sample must be expunged by the prosecuting district attorney if (1) the charge is dismissed, (2) the defendant is acquitted of the charge, (3) the charge is not filed within a designated Chapter 8 Criminal Law and Procedure
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time period, or (4) the defendant is guilty of a lesser-included misdemeanor that is not on the list of offenses contained in the act.
 If the charge is dismissed, there is an acquittal, or there is a conviction of a non-listed lesser-included misdemeanor, the prosecuting district attorney must initiate the process by: Verifying that a qualifying circumstance exists; signing a verification form if the State dismissed the charge, or obtaining a judge's signature on the form if the court dismissed the charge or there was an acquittal; and then forwarding the form to the State Bureau of Investigation (SBI). The State has 30 days to complete the verification form and send it to the SBI.
 If the DNA record and sample is not required to be kept under some other provision of law, the SBI expunges the record and sample from the State DNA Database and Databank. The expunction is to take place within 30 days of the SBI's receipt of the verification form, and a letter confirming the expunction is sent to the defendant. If the defendant's sample is not eligible for expunction, then a letter so indicating is sent to the defendant.
 Until June 1, 2012, if the charge is not filed within a designated time period (as opposed to the other qualifying circumstances), then the defendant must initiate the process by providing the district attorney with a request form for the expunction. On or after June 1, 2012, the request form requirement expires, and the State is responsible in all circumstances with initiating the process.
 The defendant may seek judicial review based on (i) the State's determination that the defendant is not eligible for expunction, or (ii) inaction on the request by the prosecuting attorney or the SBI within the prescribed time periods.
 If the DNA record and sample is not expunged within the prescribed time, then a database match of the defendant's DNA sample with an unknown sample, occurring after the expiration of the statutory period for expunction, is invalid and not admissible as evidence in a criminal proceeding against the defendant.
 A defendant's DNA sample contained in the DNA databank, which would otherwise be expunged, is exempt from expunction if it is part of an object which contains evidence relating to another person. The DNA record in the database would be expunged.
 Amendments. – The act makes several changes to existing laws:
 Amends definitions, including "DNA Sample" (to specifically include "cheek swabs"); "State DNA Database" (describes the various types of DNA records); and provides new definitions for "arrestee," "criminal justice agency," and "conviction."
 States the types of records that the Database shall store and maintain, including: Crime scene evidence; arrestees, offenders, and persons found not guilty by reason of insanity, who are required to submit samples; persons required to register as sex offenders; missing persons; unidentified persons or body parts; relatives of missing persons; and anonymous DNA profiles for forensic validation.
 Deletes the term ―blood‖ to conform to the language in the section on testing to reflect the additional methods of DNA sampling provided in the Article.
 Clarifies that a defendant who is convicted but not sentenced to confinement, and who provides a sample that cannot be loaded into the State DNA database for any reason, is under a continuing order to provide a DNA sample.
 Increases the penalty for willfully disclosing identifiable information in the Database to an unauthorized person from a Class 1 misdemeanor to a Class H felony, as well as increasing the penalty in the same manner for a person who unlawfully obtains that information.
 Amends the statute relating to confidentiality of records to clarify that DNA records and samples are not public records; that the SBI is not required to Chapter 8 Criminal Law and Procedure
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provide the State DNA Database as a discovery matter; that individual records and samples are discoverable under the rules of criminal procedure; and specifies the authorized purposes for which DNA records and samples may be released, including: Law enforcement identification purposes; criminal defense and appeal purposes; forensic validation studies; and establishment or maintenance of a population statistics database.
 Reporting. – The act contains several report and recommendation requirements.
 The SBI is directed to report annually to the Joint Legislative Commission on Governmental Operations and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee. The report is to include a calendar year summary of the operations and expenditures associated with the DNA Database and Databank and specific data on the number of arrestee samples, matches, expunctions, and processing times.
 The Department of Justice, in consultation with the Administrative Office of the Courts and the Conference of District Attorneys, is directed to study, develop, and recommend an automated procedure to facilitate the expunction process. The report must be made to the Joint Legislative Commission on Governmental Operations and to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee, on or before the effective date of the act.
This act becomes effective February 1, 2011. (HAP)
Ban Electronic Sweepstakes
S.L. 2010-103 (HB 80) prohibits the use of electronic machines or devices for conducting or promoting sweepstakes. The act makes it unlawful for any person to operate, or place into operation, an electronic machine or device to conduct a sweepstakes through the use of an entertaining display, or to promote a sweepstakes that is conducted through the use of an entertaining display. It is the intent of the act to prohibit any mechanism that seeks to avoid application of the act through the use of subterfuge or pretense. The act provides a Class 1 misdemeanor for a first offense, a Class H felony for a second offense, and a Class G felony for a third or subsequent offense. Each violation of the act is a separate offense. The act does not make unlawful any activity lawfully conducted on Indian lands pursuant to a Tribal-State Gaming Compact.
Provisions are made for the seizure and disposition of any electronic machines and devices prohibited in the act, and several technical changes are made to existing gaming definitions to clarify that additional forms of payment, such as debit cards and prepaid cards, are included in the definition.
This act becomes effective December 1, 2010, and applies to offenses committed on or after that date. (SS)
Amend Felony Firearm Act/Clarify Britt Case
S.L. 2010-108 (HB 1260) amends the State Felony Firearms Act to create a process for persons who have been convicted of certain felonies to petition the court for restoration of firearms rights.
 The act establishes specific criteria that must be met in order to qualify for the restoration of firearms rights including the following: The person may have been convicted of one nonviolent felony only. A nonviolent felony does not include Class A, B1, or B2 felonies, and also does not include any Class C through I felony if the offense includes an assault, the person possessed or used a firearm in the commission of the offense, or the offense is one that requires the person to register as a sex offender. Chapter 8 Criminal Law and Procedure
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 The person's citizenship rights must have been restored for at least 20 years prior to the petition.
 The person must not have been convicted of any violent misdemeanor since the felony conviction.
 The person must be a resident of North Carolina for at least one year prior to the petition.
 The person must submit fingerprints for a criminal background check.
 The court must deny the petition of any person who:
 Is ineligible to possess firearms under a provision of law other than G.S. 14-415.1.
 Is under indictment for a felony.
 Is a fugitive from justice.
 Is an unlawful user of drugs or alcohol.
 Is or has been dishonorably discharged from the military.
 Has been convicted or received a Prayer for Judgment Continued (PJC) for a violent misdemeanor.
 Has received a PJC for another felony.
 Is awaiting trial, appeal, or sentencing for a disqualifying crime.
 Is currently subject to a domestic violence protective order or a civil no contact order.
The burden is on the petitioner to establish by a preponderance of the evidence that they
are entitled to the restoration. If a petition is denied, the person may petition again after one year from the date of denial, or if the denial was based solely on the existence of a domestic violence protective order or civil no contact order, the person may petition again upon expiration of the order. If a petition is granted, the clerk of court must forward certified copies to the sheriff of the county in which the petitioner resides, the Department of Justice, and the national instant background check system index.
There is a $200 fee for filing the petition, unless the petitioner is indigent. Conviction of a subsequent felony after restoration of firearms rights results in an automatic revocation of the firearms rights restoration, and makes the person ineligible to have those rights again restored. The act provides a Class 1 misdemeanor for submitting false information in a petition, and conviction of this offense results in disqualification from further petitioning for the restoration of firearms rights.
Additionally, the act provides that the State Felony Firearms Act does not apply, and there is no disentitlement if a person is convicted of a felony pertaining to antitrust violations, unfair trade practices, or restraints of trade.
The act requires the Attorney General to submit a copy of the act to the U.S. Attorney General, the United States Department of Justice, and the federal Bureau of Alcohol, Tobacco, and Firearms for review to determine if a person can legally purchase and possess a firearm under federal law if this act would allow it under State law. The Attorney General shall report the response to the Joint Legislative Corrections, Crime Control, and Juvenile Justice Oversight Committee.
The provision of this act requiring the Attorney General to submit this act to other agencies became effective July 20, 2010. The remainder of this act becomes effective February 1, 2011, and applies to offenses committed on or after that date. Prosecutions for offenses committed before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions. (SS)
Require Certain Sex Offenders to Register
S.L. 2010-174, Sec. 16 (HB 726, Sec. 16) amends the effective date of a previous law, to require additional sex offenders convicted in another state to register in this State. Chapter 8 Criminal Law and Procedure
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In 2006, the General Assembly amended the sex offender registration statutes to require any person who has a "final conviction in another state of an offense that requires registration under the sex offender registration statutes of that state" to register in North Carolina as a sex offender. The effective date for this requirement was for all offenses committed on or after December 1, 2006, and to all individuals who move into this State on or after December 1, 2006.
This section changes the effective date for the registration requirement to include all offenses committed prior to, on, or after December 1, 2006, and all individuals who move into this State prior to, on, or after December 1, 2006. However, the applicability of the new effective date is limited to anyone who on or after October 1, 2010, is currently registered as a sex offender, is serving an active sentence, is on supervised probation, parole or post-release supervision, or is convicted of a felony.
This section becomes effective October 1, 2010. (SS) Chapter 8 Criminal Law and Procedure
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Chapter 9 Education
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Chapter 9
Education
Dee Atkinson (DA), Drupti Chauhan (DC), Sara Kamprath (SK), Kara McCraw (KM)
Enacted Legislation
Public Schools
Reform Low-Performing Schools
S.L. 2010-1 (SB 704) authorizes the State Board of Education (SBE) to approve a local board of education's (local board) request to reform any school in its local school administrative unit (LEA) identified by the SBE as a continually low-performing school. The SBE is given authority to authorize local boards to adopt one of four reform models:
 Transformation model. – Requires the following areas be addressed in transforming the school:
 Developing and increasing teacher and school leadership effectiveness.
 Comprehensive instructional reform strategies.
 Increasing learning time and creating community-oriented schools.
 Providing operational flexibility and sustained support.
 Restart model. – Authorizes the local board to operate the school in one of the following ways:
 With the same exemptions from statutes and rules as a charter school.
 Under the management of an educational management organization selected through a rigorous review process.
Schools operating under this model remain under the control of the local board, and employees assigned to the school remain employees of the LEA with the protections provided by statute for employment of public school teachers. The act clarifies that it should not be interpreted to increase the maximum number of charter schools authorized by statute and that no school authorized under the restart model will count against the authorized nu